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Japan and US confirm rare joint intervention to prop up the yen

From Al Jazeera · () English

Translated from English, summarized and contextualized by DistantNews.

At a glance

News Named sources New plan
  • Japan and the United States have confirmed a rare, coordinated intervention to buy yen, aiming to halt its slide to 40-year lows.
  • U.S. President Donald Trump stated Washington's support for the yen is a sign of friendship and aims to bolster the global economy.
  • The intervention, the first since 2011, aims to curb import price increases and inflation in Japan, which have impacted household finances and Prime Minister Takaichi's approval ratings.

Japan and the United States have confirmed a rare, joint intervention in currency markets to buy yen, signaling a strong commitment to halt the Japanese currency's sharp decline. The yen had fallen to 40-year lows against the dollar, prompting concerns about its impact on import costs and inflation within Japan.

They have a weakening yen, and they wanted a little bit of help. And we’re always there for Japan.

— Donald TrumpExplaining the U.S. decision to join the intervention to support the Japanese yen.

U.S. President Donald Trump described the intervention as a gesture of friendship and a move 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 told reporters. This coordinated action underscores the shared resolve of both nations to prevent negative spillovers from the yen's sell-off, which could also affect U.S. Treasury yields.

The Japanese Ministry of Finance stated that Friday's intervention, conducted with the U.S. Treasury Department, aimed to "counter excessive volatility and disorderly movements" in the yen. The ministry affirmed its close communication with U.S. counterparts and its readiness to conduct further joint interventions if necessary. This marks the first such coordinated action since 2011, following a devastating earthquake in eastern Japan.

The Japanese Ministry of Finance remains attentive and in close communication with our counterparts at the U.S. Treasury. We will not hesitate to conduct further joint intervention.

— Japanese Ministry of FinanceIn a statement confirming the joint intervention and signaling future actions.

Analysts suggest the intervention is crucial for Japan, which has been struggling with rising import prices and inflation that strain household budgets and affect Prime Minister Sanae Takaichi's approval ratings. Bank of Japan data indicated that Tokyo may have sold as much as $58.97 billion to buy yen in preceding market actions. U.S. Treasury Secretary Scott Bessent reiterated Washington's support for Japan's efforts to correct the yen's "substantial undervaluation" and called for further interest rate hikes by the Bank of Japan, which recently signaled a potential early rate increase.

We strongly support Japan’s decisive market and monetary steps to correct the substantial undervaluation of the yen.

— Scott BessentU.S. Treasury Secretary, confirming U.S. participation and support for Japan's currency policy.
DistantNews Editorial

Originally published by Al Jazeera in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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