The U.S. Treasury has added Japan to its monitoring list for potentially unfair foreign-exchange practices, highlighting the global risks associated with monetary-policy divergence. This comes as Japan faces currency stress, underscoring the challenges posed by the U.S. dollar for both wealthy and developing economies. Concerns are growing over Japan's approach to managing currency risks, particularly in light of the Bank of Japan's attempts to normalize policy amidst global easing trends. Experts, including Hippolyte Fofack, argue that Japan must hedge currency risks to prevent a defense funding crisis, as the yen carry trade unwind poses significant challenges.