First joint US-Japan yen intervention since 2011 confirmed; dollar dropped to 157.07 yen from a 40-year high of 164. More coordinated action is possible.
Japan and the United States intervened jointly in currency markets last week for the first time since 2011, a rare coordinated effort to halt the yen's slide to a fresh 40-year low.
Japan's finance ministry said Monday that the operation with the US Treasury Department "countered excessive volatility and disorderly movements in the Japanese yen in recent months." Treasury Secretary Scott Bessent said in a social media post that the "coordinated foreign exchange actions countered disorderly yen movements," and added: "We strongly support Japan's decisive market and monetary steps to correct the substantial undervaluation of the yen."
President Donald Trump told reporters Sunday that Washington had answered a request from Tokyo. "They have a weakening yen, and they wanted a little bit of help. And we're always there for Japan," Trump said.
The dollar was down 0.2% at 157.07 yen after Trump's remarks, well off the dollar's 40-year high of 164 touched last month. It rose back to 157.70 yen once the finance ministry had issued its statement.
Both governments said they would not hesitate to intervene together again. The action was meant to keep a sell-off in the yen and Japanese government bonds from spilling into the global economy and lifting borrowing costs for Washington. The last joint operation came in 2011, when the two countries sold yen to weaken it after the earthquake and tsunami that devastated eastern Japan.
The yen has been weak because Japan's central bank rate sits well below the Federal Reserve's. The Bank of Japan raised its main rate to 1% in June, the highest since September 1995, while the Fed's benchmark rate is in a range of 3.50% to 3.75%. That differential makes yen-denominated assets less attractive to international investors. The dollar pushed above 160 yen after that hike, a move tracked in Dollar Holds above JPY 160 after BOJ Hike; Aussie Firms on RBA Hold. Japan also carries a decades-long slide in its working-age population and a heavy reliance on energy imports priced in dollars. Productivity growth has lagged.
Bank of Japan data indicated Tokyo may have sold almost $59 billion of US dollars to buy yen on Thursday in New York trading, before Friday's confirmed joint operation. The US has not confirmed the size of its intervention. A Reuters photograph of a notepad in front of Bessent during a cabinet meeting on Friday read: "To Do: Buy Japanese Yen $5-10 bil."
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