US and Japan Intervene in Currency Markets for First Time Since 2011

The US and Japan have taken joint action to prop up the yen, which has been sliding towards 40-year lows. The Bank of Japan sold nearly $60 billion to support the currency on Friday, with the US contributing between $5 billion and $10 billion. This marks the first joint intervention by the two countries since 2011.

The timing of the intervention is being closely examined, particularly given the recent earthquake in Japan and the prospect of a Federal Reserve rate rise as soon as next month. Scott Bessent's 'to-do' list revealed US plans to spend between $5 billion and $10 billion on yen support.

The joint action has arrested a slide that took the yen to 40-year lows last week, with renewed currency weakness a feature of Sanae Takaichi's nine months as prime minister. The Bank of Japan had delayed an interest rate rise last week due to the earthquake and may have been hesitant to raise rates given the yen's recent weakness.