To enter the Bank of Japan visitors must cross a seismic isolation joint in the pavement, designed to protect the building from earthquakes. For much of my career Japan’s economy has been similarly uncoupled from the world around it. Japan was a strange economy in which public debts could soar to extreme highs without consequence, interest rates and bond yields were stuck near zero and inflation never materialised. It was often used as an example to justify calm about indebted governments.

All that has now changed. Japan is normalising—and giving the world plenty to worry about. In recent weeks America has helped its government prop up its currency, the yen, which has been falling even as interest-rate rises have loomed. The pressure on the exchange rate reflects investors’ worries about the difficulty of tightening monetary policy to fight inflation in an economy with so much public debt. 

America’s intervention stems from its interest in the stability of a financial system which is the largest foreign holder of its Treasury bonds. Japan’s massive bond holdings are one example of how its balance-sheet has become deeply interwoven with the global financial system. Investors have borrowed yen at low interest rates to buy assets with higher yields abroad—an activity dubbed the “carry trade”—while its enormous pension fund, needed to pay for its ageing population, has gorged on foreign equities.

On tomorrow’s episode of Inside Economics we will ask whether this could all go wrong. Could Japan be forced to dump its foreign assets to defend its currency? Is it wise for America to prop up the yen? What happens if rates rise without the government, which is planning a fiscal stimulus, getting its budget in order?

To answer these questions and more I’ll be joined in the studio by Josh Roberts, our capital markets correspondent. Ethan Wu, our Asia business and finance editor, will dial in from Singapore. The show will be available to watch from Tuesday from 6pm London time (1pm in New York) tomorrow. Tune in then—and let us know what you think by writing to us at insider@economist.com.