US and Japan Form Informal Currency Alliance Amid Global Economic Uncertainty
The recent coordinated intervention by the United States and Japan has sparked talk of an informal 'currency alliance' between the two countries. According to Citi strategists, this arrangement links foreign-exchange policy with their wider economic and national-security relationship.
Japan's Vice Finance Minister for International Affairs Atsushi Mimura described the latest intervention as the culmination of that alliance. Citi emphasized that the arrangement should not be viewed as a monetary union but rather as policy coordination, which may also support Japan's $550 billion U.S. investment programme.
The bank does not believe Treasury Secretary Scott Bessent is implementing a proposed 'Mar-a-Lago accord' aimed at reshaping the international monetary system. However, dollar-selling intervention through the Federal Reserve's Foreign and International Monetary Authorities facility was one element of that proposed framework.