US and Japan Intervene to Stabilize Yen-Dollar Exchange Rate

The U.S. dollar has weakened sharply against the Japanese yen after the two countries confirmed they had intervened in markets to stabilize exchange rates.

Before last week, the dollar was trading at a 40-year high of over 163 yen, but it dropped below 160 yen on Monday after regulators were suspected of stepping in. The intervention led to an even greater drop of about 1% to 156.34 yen, making it one of the biggest changes in exchange rates.

The move has been welcomed by Tokyo as it aims to reduce the impact of a weak currency on imports and inflation. Japan's Finance Minister Satsuki Katayama confirmed the intervention, stating that the finance ministry had purchased yen in coordination with the U.S. Treasury Department.