Dollar Plunges Against Yen After Joint Market Intervention
The US dollar plummeted against the Japanese yen after market interventions by regulators from both countries. Before last week, the dollar had reached a 40-year high of 163 yen but dropped below 160 yen after the suspected intervention.
Early Monday morning, the dollar fell about 1% to 156.34 yen following the official announcement of the joint action. This significant change in exchange rate has been a cause for concern for Tokyo as Japan's weak currency pushes up prices and inflation due to its high import costs.
The US government had hinted at lending a hand to counterbalance the yen's weakness, with President Donald Trump stating that 'We have a good relationship with Japan. We're very strong, - very, very strong financially, and they are, you know, they have a weakening yen, and they wanted a little bit of help, and we're always there for Japan.' He added that the US received 'financial benefit' from the intervention and described it as a 'signal of friendship.'
Finance Minister Satsuki Katayama confirmed the coordinated action with the US Treasury Department, citing their aim to counter 'excessive volatility and disorderly movements in the Japanese yen in recent months.' He noted that they would not hesitate to act further if necessary.