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🇰🇷 South Korea /Economy & Trade

Japan and U.S. Jointly Intervene in Market to Support Weak Yen; Trump Calls it 'Signal of Friendship'

From Hankyoreh · () Korean

Translated from Korean, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Japan and the United States jointly intervened in the foreign exchange market to combat the yen's sharp decline.
  • This marks the first joint intervention in the form of yen buying since 1998, signaling close coordination between the two nations.
  • The intervention aims to address excessive volatility and disorderly movements in the yen, with both countries pledging continued communication and potential further action.

Japan and the United States have jointly intervened in the foreign exchange market to defend the Japanese yen against its rapid depreciation. The coordinated action, confirmed by Japanese Finance Minister Satsuki Katayama, aims to counter "excessive volatility and disorderly movements" in the yen's value.

recent excessive volatility and disorderly movements in the yen's value

— Satsuki KatayamaExplaining the rationale behind the joint intervention.

This intervention marks a significant development, as it is the first time since 2011 that the U.S. has directly participated in defending the yen, and the first time since 1998 that they have formed a joint front by buying yen. The yen had recently seen dramatic fluctuations, soaring to 163 yen per dollar before falling to the 157 yen range within days. The Bank of Japan and the Japanese government had already injected an estimated 6 to 7 trillion yen into the market on October 30-31.

will not hesitate to take additional joint action

— Satsuki KatayamaPledging continued cooperation with the U.S. to stabilize the yen.

Discussions for joint action reportedly began in May during U.S. Treasury Secretary Scott Bessent's visit to Japan, where he offered full understanding for cooperation on the yen's exchange rate. Japan plans to utilize the U.S. Federal Reserve's structure to secure dollar funds by collateralizing its substantial holdings of U.S. Treasury bonds, rather than selling them, which could have destabilized the U.S. long-term interest rate market.

Japan wanted a little help because the yen was getting weak

— Donald TrumpExplaining the U.S. decision to support the yen.

Former U.S. President Donald Trump described the support for the yen as a "signal of friendship," citing the strong relationship between the U.S. and Japan. He stated that Japan requested assistance as the yen weakened, and that the move would benefit both economies and the global economy. The intervention underscores the shared interest in maintaining stability in currency markets, especially given the interconnectedness of the global financial system.

Above all, it is a signal of friendship

— Donald TrumpDescribing the U.S. intervention as a gesture of goodwill towards Japan.
DistantNews Editorial

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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