Japan and US Unite Against Yen's Free Fall

The Japanese government and the US Treasury Department have conducted coordinated yen-buying intervention to halt the yen's slide to fresh 40-year lows. This marks a rare bilateral action since 2011, when Japan and the US intervened in the currency market after the devastating earthquake in eastern Japan.

In a joint statement, Japan's finance ministry said that Friday's intervention with the U.S. Treasury Department 'countered excessive volatility and disorderly movements in the Japanese yen in recent months'. The ministry added that it will not hesitate to conduct further joint intervention if needed.

President Donald Trump stated on Aug 2 that the US is helping Japan to prop up the yen as a sign of friendship and to help the world economy. This move has sparked concerns about global spillovers, particularly with regards to adding upward pressure on already rising US Treasury yields.