US and Japan Intervene to Support Weakened Yen

The US and Japan intervened in August 2026 to support the yen, disrupting expectations of its permanent weakness. This joint currency intervention could be a turning point for global markets.

The move was the first joint intervention by the US Treasury and Japan since 2011. It was also the first time since 1998 that the United States had bought yen alongside Japan's Ministry of Finance. The market reacted noticeably: the yen has held near 158 per dollar, compared with almost 164 at the end of July.

The August measures were largely defensive in nature, they halted the yen's decline but did not establish a sustained move toward a lower dollar exchange rate. To persuade Japanese institutional investors to send less capital abroad, Tokyo may need a more active currency policy.