US and Japan Conduct Joint Intervention to Support Weakening Yen

The US and Japan have conducted their first joint intervention since 2011 to support the yen, which has been weakening due to interest rate differences between the two countries. The move was triggered by concerns over Japan's massive debt under new Prime Minister Sanae Takaichi.

The scale of the joint operation on July 31 was not disclosed, but it marks a significant development in the relationship between the two nations' economies. US President Donald Trump confirmed the coordinated intervention, describing it as a 'signal of friendship' with Japan and saying it was 'good for the world economy'. He added that the US would 'not hesitate to participate in further joint interventions', citing the need to correct the yen's undervaluation.

The yen has been under pressure due to its low interest rates, which have fueled the so-called 'carry trade' - a phenomenon where investors borrow funds at low interest rates and invest them in higher-yielding assets. The intervention came after the yen reached its weakest level since 1986, when it hit 163.99 per dollar last month.