That is the topic of my latest Free Press column, here is one excerpt:

What else are currency values telling us today? The Japanese yen continues a very weak run, now coming in at about 158 to the U.S. dollar. I can recall when it was common for the yen to stand at about 100 to the dollar, as recently as 2016, so that is a significant depreciation.

Japan usually has a lower inflation rate than the U.S., so why is the yen so weak? Part of the problem is the fiscal position of the Japanese government. The current ratio of Japan’s government debt to its GDP is over 200 percent; in other words, Japan’s government owes twice as much as the country’s entire annual economic output. Unlike the U.S., Japan does not have the global reserve currency, nor the world’s strongest military. Furthermore, Japanese interest rates have been rising lately, which makes it harder for the government to keep borrowing to finance the debt. There is some small but nontrivial risk of the country entering a downward spiral, where higher interest rates worsen the fiscal position, which in turn leads to higher interest rates, and so on, ending in a financial crisis.

Iran and the United States are discussed as well.