Japan-USD Currency Intervention Sends Yen into Tailspin

The yen hit its weakest levels against the dollar in roughly 40 years when USD/JPY tested and exceeded the 160 mark in late July 2026.

In response, Japan's Ministry of Finance executed a single tranche of yen purchases estimated at around $53 billion on July 31 into August 1, marking the first coordinated intervention with the US since 2011.

The move caught many traders off guard as the US Treasury participated directly in yen purchases, including selling euros to fund the operation, and issued warnings to major banks telling them to prepare for active involvement in currency markets.

This is not Japan's first attempt to defend the yen; since 2022, Tokyo has spent approximately $150 billion in cumulative yen-support operations, including a $35 billion single intervention in 2024.