Japan and US confirm rare joint intervention to prop up yen
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- Japan's Finance Ministry confirmed the Friday joint yen-buying intervention with the US Treasury Department — the first such coordinated action since 2011's post-earthquake response — stating it "countered excessive volatility and disorderly movements" in the yen.
- President Trump announced Washington's participation as a "sign of friendship," telling reporters Japan "wanted a little bit of help" and "we're always there for Japan."
- The yen surged as much as 1.4% to a nearly three-month high of 155.20 per US dollar, compounding a 3.8% gain over the prior two sessions, while Tokyo may have sold as much as $58.97bn buying yen in New York markets on Thursday alone.
- Treasury Secretary Scott Bessent confirmed the US effort and said Washington "will not hesitate to participate in further joint intervention," while reiterating calls for Bank of Japan interest rate hikes.
- The Bank of Japan offered its most explicit signal to date of an early rate hike even as it held monetary policy steady at its latest meeting.
- The Nikkei tumbled as the rapid yen appreciation weighed on Japanese equities, reversing from a one-week high, while analysts noted the intervention adds pressure on already rising US Treasury yields.
- South Korea also intervened to buy its won on Thursday, in a sign of broader regional currency coordination.
Why it matters: This is the first US-Japan joint currency intervention in over a decade, deploying Washington's dollar firepower to backstop an ally. Bessent's explicit push for BoJ rate hikes paired with the BoJ's most explicit tightening guidance marks a coordinated turn away from the yen weakness that had fueled Japanese inflation and dented PM Takaichi's approval ratings.
