Joint Intervention by Japan and US Fails to Sustain Yen's Gains

The Japanese government and the U.S. Treasury Department jointly intervened in the foreign exchange market on July 30, selling up to $59 billion worth of assets to buy yen and prop up its value.

The intervention was successful at first, with the yen strengthening from 163 per dollar to 157 per dollar by late July. However, by August 11, it had weakened back to 159 yen per dollar.

Economists say that this intervention does not address the fundamental causes of the yen's weakness, which include a significant difference in interest rates between Japan and the U.S., concerns about Japan's fiscal policy, and higher returns on assets in other countries.