Dollar Weakens Sharply Against Yen After Joint Market Intervention

The US dollar experienced a significant decline against the Japanese yen on Monday following confirmation from President Donald Trump and Japan's finance minister that both countries had intervened in markets.

The dollar, which had been trading above 163 yen, touching 40-year highs, fell to below 160 yen after regulators were suspected of stepping in. The exchange rate dropped another 1% to 156.34 yen following the official announcement of intervention.

Tokyo has been frustrated with the prolonged weakness of the yen against the dollar due to Japan's high import dependence, which pushes prices higher and increases inflation. Efforts earlier this year to raise the value of the yen did little to budge the exchange rate.

In a joint statement, Trump said the US had intervened at Japan's request due to the country's weakening currency. He stated that 'We have a good relationship with Japan,' adding that 'we're always there for Japan.' The finance minister confirmed the intervention, stating it was done to counter excessive volatility and disorderly movements in the yen.