Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

EDITORIAL: U.S. Saves Japan, Lets Russia Sweat

The contrast between the United States' attitude to the currency crises affecting the Japanese yen and the Russian ruble provides an insight into Russia's shrunken role in the world.

The Russian government has been begging the United States to convince the International Monetary Fund, which it largely controls, to hand out a loan to help support the ruble.

A $10 billion loan from the IMF would almost certainly be enough to calm markets and give Russia the breathing space it needs to implement reforms.

The IMF has stalled for the past month, arguing that the threat of a financial crisis is the only thing that will force Russia to put its economic house in order.

Russia has made all the right noises, promising spending cuts, tax raises and job losses. But despite some promising recent signs from the United States and the IMF, the country is still waiting for the big rescue package that will be needed to save the currency.

Japan, on the other hand, has not had to wait long for its rescue package. Confronted by the decline in the yen and the threat that China would be forced to devalue its currency, the United States leapt into action this week spending billions of its own dollars to support Japan's currency.

Unlike in the case of Russia, where the United States feels it can keep Russia on tenterhooks while it is taught a lesson, the U.S. intervention to help Japan has come with almost no strings attached.

Indeed, the Japanese government, which two years ago promised to launch a financial "Big Bang" to reform its economy, has resolutely resisted thorough reform. It refuses to let major banks fail under the weight of their bad debts or stimulate demand with major tax cuts.

Moreover, the strange thing about U.S. aid for Japan is that it will likely be much less useful than aid for Russia. The U.S. government cannot afford to underwrite the currency of a huge trading nation like Japan for long. The cash involved is too huge. Compare this with Russia where the IMF's $10 billion would be enough to completely turn around the markets.

Of course, the reasoning behind the U.S. intervention to support the yen is difficult to understand from this distance. Stopping a blowout in the U.S. trade deficit is clearly a major concern.

But it is a clear confirmation that Russia, despite its nuclear warheads, comes much lower on the list of U.S. priorities than Japan or China. The United States is more concerned about its trade balance than a stricken former superpower.