Japan and US Confirm Coordinated Yen-Buying Intervention to Halt Currency Slide
L'essentiel
- Japan and the United States confirmed a rare, coordinated yen-buying intervention to prevent the Japanese currency from falling to 40-year lows, with Tokyo signaling readiness for further action.
- The move aims to curb inflation and stabilize the global economy.
Résumé généré par IA
Pourquoi c'est important
Japan has been struggling to curb a relentless drop in its currency, pushing up import prices and stoking inflation, which has impacted household finances and Prime Minister Sanae Takaichi’s approval ratings.
Japan and the United States have confirmed a rare, coordinated yen-buying intervention to halt the Japanese currency’s slide to 40-year lows, with Tokyo signalling it is willing to take further action if needed.
The Japanese Ministry of Finance confirmed the joint intervention after a statement by US President Donald Trump on Sunday announced that Washington was helping to prop up the yen as a sign of friendship and to support the global economy.
“They have a weakening yen, and they wanted a little bit of help. And we’re always there for Japan,” Trump said in response to a reporter’s query about why the US is helping to support the currency.
Analysts say the intervention underscores both countries’ resolve to prevent global spillovers from a sell-off in the yen and Japanese government bonds, including by adding pressure on already rising US Treasury yields.
The dollar fell 0.2 percent to 157.07 yen after Trump’s remarks, well off the 40-year high near 164 yen hit late last month, but it rose back to 157.70 yen after the Japanese Finance Ministry’s statement.
Japan has been struggling to curb a relentless drop in its currency that pushes up import prices and stokes broader inflation, hitting household wallets and Prime Minister Sanae Takaichi’s approval ratings.
In its statement, Japan’s Finance Ministry said Friday’s yen-buying intervention with the US Treasury Department “countered excessive volatility and disorderly movements in the Japanese yen in recent months”.
“The Japanese Ministry of Finance remains attentive and in close communication with our counterparts at the U.S. Treasury,” it added. “We will not hesitate to conduct further joint intervention.”
The joint intervention is the first since a 2011 coordinated action to weaken the yen after the devastating earthquake in eastern Japan.
Tokyo may have sold as much as $58.97bn to buy yen when it intervened in New York markets on Thursday, Bank of Japan data indicated, before Friday’s confirmed joint intervention with Washington.
US Treasury Secretary Scott Bessent also confirmed Friday’s effort, noting on Sunday that Washington “will not hesitate to participate in further joint intervention”.
“We strongly support Japan’s decisive market and monetary steps to correct the substantial undervaluation of the yen,” Bessent said in a separate statement on X, repeating his calls for further interest rate hikes by the Bank of Japan.
In line with Bessent’s repeated calls for higher Japanese interest rates, the Bank of Japan on Friday offered its most explicit signal to date of an early rate hike, even as it kept monetary policy steady.
In a sign of broader policy coordination, South Korea also stepped in to buy its won currency on Thursday.
Japan intervened in April and May, buying yen, but the move triggered only a brief rebound. The Bank of Japan’s June rate hike to a 31-year high of 1 percent also gave the struggling currency little lasting boost.
À surveiller
Perspective IA — des possibilités, pas des certitudes
Japan and the US will conduct further joint currency intervention.
Très probable · En quelques semaines
Questions ouvertes
- What specific triggers will prompt further joint intervention?
- How effective will this intervention be in the long term?
- What will be the Bank of Japan's next steps regarding interest rates?
