US, Japan Confirm Joint Yen Intervention to Halt Slide
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- Japan and the US confirmed a coordinated yen-buying intervention, the first joint action since a 2011 effort to weaken the yen after the devastating earthquake in eastern Japan, with Japan's Finance Ministry vowing it "will not hesitate to conduct further joint intervention."
- Donald Trump announced the intervention on Sunday, calling it "a sign of friendship" and saying "we're always there for Japan," after which the dollar fell 0.2% to 157.07 yen—well off the 40-year high near 164 yen hit late last month.
- Tokyo may have sold as much as $58.97 billion to buy yen during its Thursday intervention in New York markets, according to Bank of Japan data, before Friday's confirmed joint action with Washington.
- Treasury Secretary Scott Bessent confirmed Friday's effort, stating Washington "will not hesitate to participate in further joint intervention" and reiterating his calls for further interest rate hikes by the Bank of Japan.
- The Bank of Japan on Friday offered its most explicit signal to date of an early rate hike, even as it held monetary policy steady at 1%—a 31-year high—following June's hike that gave the yen little lasting boost.
- South Korea also stepped in to buy its won currency on Thursday, in a sign of broader regional policy coordination against currency weakness.
Why it matters: Japan's prior solo interventions in April and May and its June rate hike to a 31-year high failed to give the yen lasting support, leaving Prime Minister Takaichi's approval ratings vulnerable as import-driven inflation hit household budgets. The first US-Japan joint action since 2011—with Treasury's Bessent publicly backing further moves and calling for BoJ tightening—signals Washington is willing to deploy balance-sheet firepower alongside rhetorical pressure to anchor the yen.
