US and Japan Intervene Jointly to Support Yen

US Treasury Secretary Scott Bessent has stated that joint action between the US and Japan has successfully countered disorderly movements in the yen. The currency edged higher on Sunday as markets anticipate further intervention from both countries.

Bessent said that the coordinated foreign exchange action was necessary to counter the yen's undervaluation, which he described as 'very significant'. He emphasized the importance of joint intervention, stating that the US Treasury remains attentive and in close communication with counterparts at the Bank of Japan and Japan's Ministry of Finance.

The yen has been under pressure due to rising oil prices, Japan's persistent budget deficits, and a yawning interest rate gap with the US and other major economies. The depreciation has sounded alarm bells in Tokyo, with rising import costs squeezing businesses and consumers.

According to Bessent's social media posting on X, the Trump administration strongly supports 'Japan's decisive market and monetary steps to correct the substantial undervaluation of the yen'. He also mentioned that a US central bank backstop for foreign central banks and monetary authorities should be 'upsized'.