US and Japan Teaming Up to Intervene in Currency Markets

Currency traders are bracing for a potential joint US-Japan intervention in currency markets, which could be confirmed on August 3. The last time the two countries intervened together was in 2011, when Bitcoin traded at under $10.

The yen has been at its weakest level against the dollar since 1986, prompting Japanese Finance Minister Satsuki Katayama to prepare for joint action with US authorities. The US Treasury has reportedly outlined a potential intervention size of $5 billion to $10 billion in yen purchases, according to US Treasury Secretary Scott Bessent.

The intervention mechanics involve both countries' central banking authorities buying yen on open markets using dollar reserves, artificially boosting demand and pushing the yen's value higher. The Bank of Japan has already started purchasing yen during New York trading hours, suggesting the operation is underway before any formal announcement.