Dollar Weakens Sharply Against Yen After Joint Intervention

The US dollar has weakened sharply against the Japanese yen after officials from both countries confirmed they intervened in markets. This move comes as a surprise, especially given that the dollar had been trading above 163 yen just days ago.

According to reports, US President Donald Trump and Japan's Finance Minister Satsuki Katayama confirmed that their respective governments had intervened in the market to stabilize the exchange rate. The dollar dropped about 1% to 156.34 yen after the official announcement of the intervention.

The prolonged weakness of the yen against the dollar has been a source of frustration for Tokyo, as it pushes prices higher and increases inflation due to Japan's high reliance on imports. Efforts earlier this year to raise the value of the yen did little to budge the exchange rate, leading some to suspect that US regulators were lending a hand.

In his statement confirming the intervention, Finance Minister Katayama said that the finance ministry had purchased yen in coordination with the U.S. Treasury Department to counter excessive volatility and disorderly movements in the Japanese yen. Trump also weighed in on the matter, saying that the US got 'financial benefit' from the intervention and calling it a 'signal of friendship'.