US and Japan jointly intervene to prop up yen in rare move

Japan and the United States have confirmed a rare joint intervention to halt the yen's slide to a fresh 40-year low. This coordinated action, the first since 2011 following Japan's earthquake and tsunami, signals a strong commitment from both nations to stabilize the currency.

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countered excessive volatility and disorderly movements in the Japanese yen in recent months

Finance Ministry officials in Japan and U.S. Treasury Secretary Scott Bessent stated they would not hesitate to conduct further joint interventions. This move underscores their shared goal of preventing a yen sell-off from disrupting the global economy, including potentially raising borrowing costs for the U.S.

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coordinated foreign exchange actions countered disorderly yen movements

The yen's historical weakness stems largely from Japan's significantly lower central bank interest rates compared to major economies like the U.S. This disparity makes the Japanese currency less attractive to international investors. The Bank of Japan recently raised its main rate to 1%, the highest since September 1995, yet this remains substantially lower than the U.S. Federal Reserve's benchmark rate, which is in the 3.50% to 3.75% range.

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

Japan also grapples with long-term demographic shifts, including a declining working-age population, low productivity, and a heavy reliance on energy imports priced in U.S. dollars. These factors contribute to the yen's vulnerability. The intervention on Friday was described by Japan's finance ministry as countering "excessive volatility and disorderly movements" in the yen. U.S. President Donald Trump also commented, stating, "They have a weakening yen, and they wanted a little bit of help. And we're always there for Japan."

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