Japan and US Unite to Bolster Yen Amid Global Market Turmoil

The Japanese yen surged above recent 40-year lows on Monday after Japan and the US launched a joint intervention, vowing to take further action if needed to shore up the currency. The joint intervention on Friday marked the first since 2011's coordinated action to weaken the yen following a devastating earthquake in eastern Japan.

The Japanese finance ministry confirmed that the country spent as much as $36.58 billion buying yen during the joint intervention, with the US Treasury selling euros to buy yen. The amount spent by the US was not disclosed, and a Treasury spokesperson did not respond to requests for further information on the joint operation.

The intervention was aimed at preventing a selloff in the yen and Japanese government bonds from causing global spillovers, such as adding upward pressure on already rising US Treasury yields. Analysts said that the joint intervention added credibility, prompting sizable covering of yen short positions.