Japan and South Korea Stage Rare Joint Intervention to Support Yen and Won

On Thursday, Japanese and South Korean authorities joined forces to buy their respective currencies in a rare joint intervention. The move was reportedly coordinated with the United States and aimed at stabilizing the yen and won.

The intervention lifted the yen away from its 40-year low, although traders were back testing Tokyo's resolve on Friday. The Bank of Japan held interest rates steady as expected, but investors are now focused on comments from the central bank regarding future borrowing costs.

Lee Min-hyuk, an analyst at KB Kookmin Bank, noted that the interests of each country aligned, making a joint intervention effective in doubling its impact. He also mentioned that South Korea and Japan have a tightly coupled exchange rate, which made their coordinated effort more potent.

The yen was last trading at 160.64 per US dollar, 0.7% softer on the day after strengthening to as much as 157.8 in the previous session. The won firmed 2% to its highest level in nine months, while South Korea's foreign exchange authorities conducted a rare dollar-selling intervention.