Japan and US Team Up to Support Weak Yen

Japan and the US are reportedly taking joint action to support the yen after it hit its weakest level against the dollar in nearly 40 years. The intervention is expected to be announced by Japanese Finance Minister Satsuki Katayama on Monday, highlighting the commitment of both countries to preventing excessive depreciation of the Japanese currency.

The operation is a coordinated effort between the Japanese Ministry of Finance and the US Treasury Department, which has not commented on the reports yet. Market sources suggest that Japan purchased yen against the dollar during New York trading hours on Thursday, with Bank of Japan data indicating that Tokyo may have sold up to $58.97 billion to support the currency.

The widening interest rate gap between Japan and the US has been a major factor behind the yen's decline, as higher US rates have strengthened the dollar. The joint intervention comes shortly after the Bank of Japan maintained its monetary policy stance while signaling a strong possibility of future interest rate hikes.