The US Treasury and Japan's MOF bought yen together for the first time since 1998, with Bessent saying the Trump administration will not hesitate to repeat the intervention.
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The U.S. Treasury joined Japan’s Ministry of Finance in a coordinated yen-buying operation on Friday, the first such joint intervention in nearly three decades. Officials from both countries said they would act again if disorderly market conditions persist.
Japan’s Ministry of Finance announced the purchase on X, saying it was conducted under a September 2025 bilateral agreement that provides for joint action during market disruption. The ministry also said it plans to use the Federal Reserve’s Foreign and International Monetary Authorities (FIMA) Repo Facility in future operations. That facility, established in 2020, lets foreign central banks borrow dollars against Treasury holdings.
The yen had weakened beyond 163 against the dollar earlier this month, its lowest level in nearly four decades. At the time of writing, one dollar bought 156.49 yen.
Treasury Secretary Scott Bessent said on X that the Trump administration “will not hesitate” to participate in further joint intervention. He described the yen as “substantially undervalued” and said Japan was entering “an exciting new phase of Abenomics” after years of monetary stimulus strengthened the economy. Bessent called the U.S.-Japan alliance a pillar of economic and national security.
Previous U.S. interventions in the yen occurred in 1998, when Washington joined Japan in buying the currency during the Asian financial crisis, and in 2011, when the G7 sold yen after the earthquake and tsunami.
Economist Mohamed El-Erian said the coordinated messaging may be as important as the intervention itself. In a post on X, he said the two countries were using “strong words as a substitute for actual market intervention” to discourage investors from testing policymakers’ resolve. The goal, he said, is to buy time for Japan’s broader policy measures to take effect.
The intervention followed reports that the U.S. Treasury had alerted several banks it could enter the yen market alongside Japanese authorities. A Reuters photograph of Bessent’s legal pad during a Cabinet meeting showed a note reading “Buy Japanese Yen (JPY) $5-10 bil.”
Economist Peter Schiff warned days earlier that Japan’s mounting debt and currency pressures could trigger broader financial turmoil. Japan’s debt-to-GDP ratio exceeds 250%, and a sustained yen depreciation makes it harder to service foreign-currency obligations, he said.
The coordinated action reflects the seriousness with which both governments view the yen’s weakness. The Bank of Japan has raised rates only modestly, leaving the burden of defending the currency partly on fiscal and diplomatic channels. The use of the FIMA repo facility suggests Japan wants to conserve its dollar reserves while still intervening.
The yen strengthened immediately after the announcement, trading near 156.49. The interest rate differential between the U.S. and Japan remains wide. The September 2025 agreement provides a framework for further joint action if needed. Traders said the real test will come in the coming days.
Related: Dollar Holds above JPY 160 after BOJ Hike; Aussie Firms on RBA Hold
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