Yen Surges as Japan and US Conduct Coordinated Intervention
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Yen Surges as Japan and US Conduct Coordinated Intervention
- Japan and the United States have engaged in coordinated currency market intervention, marking their first joint effort since 2011, to address the yen's depreciation, which had pushed it to near 40-year lows.
- Japanese Finance Minister Satsuki Katayama is expected to announce the joint action on Monday, August 2, 2026, following operations in Tokyo and New York.
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TOKYO – Japan and the United States have undertaken a coordinated intervention in the currency market to bolster the Japanese yen, which had recently fallen to its weakest levels against the dollar since 1986. This joint action, the first of its kind in 15 years, aims to counter what both nations view as excessive and disorderly movements in exchange rates.
The intervention saw Japanese authorities buying yen and selling dollars during New York trading hours on Thursday, July 30, and Friday, July 31, 2026. Reports indicate that the US Treasury also participated, with the Federal Reserve Bank of New York selling euros to buy yen on behalf of the Treasury. A photograph from a cabinet meeting on July 31 showed US Treasury Secretary Scott Bessent’s notepad with a “To Do” item to “Buy Japanese Yen $5-10 bil,” further signaling US involvement.
The yen’s depreciation has been a concern for Japan, leading to increased import costs and inflationary pressures. For the United States, a significantly undervalued yen could impact American trade competitiveness by making Japanese exports cheaper. US Treasury Secretary Bessent had previously stated that the yen appeared “very undervalued” and that “excess volatility” in currency markets was unhealthy.
Prior to this coordinated effort, Japan had undertaken unilateral interventions in April and May 2026, spending an estimated $70 billion to support the yen. The latest actions have already triggered a dramatic rebound in the yen, which surged against the dollar, reaching ¥157.20 per dollar on Friday, its strongest level in approximately two and a half months. While the intervention has provided a significant boost, some analysts suggest its effect may be temporary, with underlying economic factors still exerting pressure on the yen.