Japan, Korea, US Unite in Rare Currency Intervention

In a rare joint intervention, Japanese and South Korean authorities stepped in to buy their currencies on the open market, lifting the yen away from its 40-year lows. The move coincided with a similar intervention by US authorities, according to sources. The Bank of Japan kept interest rates steady at 1% on Friday, but traders are now focusing on comments from the central bank regarding potential future rate hikes.

The Japanese and South Korean currencies are closely linked, making this joint intervention particularly effective. 'The interests of each country aligned,' said Lee Min-hyuk, an analyst at KB Kookmin Bank. The US likely wanted to see the exchange rates come down, given that Korea and Japan need to invest in America.

Japan has intervened in currency markets five times since 1985, often in coordination with the US or other G7 partners. This move lifted the yen from its lows, but traders are now testing Tokyo's resolve. The won also firmed up by 2% to a nine-month high.