Rare Japan-Korea Joint Intervention Shakes Up Yen and Won

In a rare coordinated effort, Japan and South Korea have intervened in their respective currency markets to support their exchange rates. According to sources and analysts, the intervention involved Japan buying yen with dollars in New York hours on Thursday, while South Korean authorities sold dollars alongside Japan.

The move gave the yen its biggest boost in almost two years, lifting it away from 40-year lows it had been hovering around earlier this week. The currency however handed some of that back on Friday as the Bank of Japan held interest rates steady at 1%, a 31-year high.

Analysts worry that interventions are unlikely to help the frail yen unless the central bank follows through with rate hikes, especially with speculators amassing large bearish bets on the yen, now worth $11.65 billion.