Yen hits three-month high after Trump helps prop up currency
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- Japan and the U.S. carried out a coordinated yen-buying intervention last week, the first such joint action since March 2011, strengthening the yen to ¥155 per dollar by Monday
- The yen rose to its highest level in three months after collapsing to nearly ¥164 per dollar last week, a 40-year low driven by interest rate differentials and carry trade pressure
- Donald Trump confirmed U.S. support for Japan’s currency efforts, telling reporters Japan sought help and that the U.S. is 'always there for Japan'
- U.S. Treasury Secretary Scott Bessent said Washington would not hesitate to join further interventions and was seen with a notebook listing a plan to buy $5bn–$10bn in yen
- Finance Ministry of Japan stated the two governments had acted together and would take additional steps if needed to stabilize the currency
- Oxford Economics assessed that the joint move would not reverse long-term yen weakness, expecting the Bank of Japan to delay rate hikes until December despite market speculation
Why it matters: The intervention temporarily reverses a steep decline that made imports more expensive and strained Japanese households, but with the Bank of Japan still lagging on rate hikes, the underlying pressure from the carry trade remains. The $5bn–$10bn planned U.S. purchase signals concrete backing, yet analysts doubt it's enough to shift structural trends without tighter monetary policy from Tokyo.
