The US and Japan conducted a rare coordinated currency market intervention, with Japan buying yen to counter excessive volatility. Both nations signaled readiness for further action if needed, as Japan also cut its economic growth outlook due to high oil prices and a weaker yen.
US Treasury Secretary Scott Bessent inadvertently exposed plans for a $5bn-$10bn Japanese yen purchase during a Camp David cabinet meeting, captured by a Reuters photographer. This revelation coincided with reports of US and Japanese intervention to strengthen the yen, which had recently hit a 1986 low.
Japan's central bank maintains 1.0% interest rate, aligns with market expectations. Yen surges 3.5% after reported intervention, with South Korea joining. BoJ warns of CPI inflation exceeding 2% in 2026's second half.
The Japanese yen hit a 40-year low against the dollar, prompting speculation of further intervention. However, experts suggest that without a shift in U.S. interest rates or coordinated global action, Japan's unilateral efforts may prove ineffective against the carry trade.
