Tokyo and Washington Unite Against Yen's Slide

Japanese Finance Minister Satsuki Katayama is set to announce on Monday that Tokyo and Washington have taken joint action to combat the yen's decline. The move aims to arrest the currency's slide to 40-year lows, with officials stressing the determination of both countries to tackle excessive yen declines.

The operation, which started earlier this month, involves rounds of yen-buying in the market by Japanese and U.S. authorities. This joint intervention is a first since 2011, seeking to boost the Japanese currency from its lowest levels against the dollar since 1986.

Treasury Secretary Scott Bessent has expressed his concerns about the yen's value, stating that it 'seems very undervalued to me'. The Treasury informed banks that they should be prepared for potential future action in the market. In a recent cabinet meeting, Bessent was seen with notes indicating a possible $5-10 billion investment in Japanese Yen.

The joint effort by Tokyo and Washington comes after Japan's government conducted yen-buying intervention in New York hours before the Bank of Japan's decision to keep monetary policy steady while signalling a strong chance of an early interest rate hike.