Japan, US in First Joint Yen Intervention Since 2011
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- Japan's Finance Ministry will announce Monday that Tokyo and Washington took joint currency-market action to arrest the yen's slide to 40-year lows, per two government officials who spoke to Reuters
- This marks the first joint yen intervention since 2011, with BOJ data suggesting Japan sold as much as $58.97 billion buying yen during New York trading hours Thursday
- BOJ kept monetary policy steady Friday while signaling a strong chance of a near-term rate hike; a yen spike shortly after Governor Kazuo Ueda's press conference is suspected to be another round of intervention
- US Treasury Secretary Scott Bessent was photographed at Friday's cabinet meeting with a notepad reading "Buy Japanese Yen (JPY) $5-10 bil," and the Treasury separately told banks to "stand ready for future action" in the yen market
- Japan's Ministry of Finance posted in English on X about "a broad range of tools" including the Fed's repurchase facility, letting Tokyo raise dollar liquidity without selling US Treasuries and triggering a Treasury selloff
- Economy Minister Minoru Kiuchi said Sunday the government will step up market communication on fiscal sustainability as Japanese government bond yields rise alongside US Treasury yields
Why it matters: The coordination gives Japan a workaround for its main intervention constraint — the need to avoid dumping its US Treasury holdings, which would spike American yields — by tapping the Fed's repo facility instead. Former BOJ official Nobuyasu Atago told Reuters both nations see inflation risks leaving their central banks "behind the curve," framing the cooperation as mutual defense of bond markets, not just the yen.
