US and Japan Launch Coordinated Yen Rescue

US and Japan have executed a coordinated intervention to rescue the yen, which rose to its highest level since early May after direct market purchases and explicit support from US Treasury Secretary Scott Bessent.

The sharp rebound was fueled by direct yen purchases, official communications with trading banks, and vocal backing from Bessent and Japanese Finance Minister Satsuki Katayama. The yen closed at 157.40 against the dollar in New York on Friday, one of its strongest recoveries after a years-long slide.

Bessent, drawing on his extensive hedge fund experience regarding Japan's position in global markets, indicated that the yen was 'significantly undervalued' and that 'excessive volatility' damages markets. Speculation regarding his direct involvement intensified after a Reuters photograph showed a notepad with a to-do list including: 'Buy $5-10bn worth of Japanese yen.'

Nobuyasu Atago, chief economist at the Rakuten Securities Economic Research Institute and a former BOJ official, noted that Bessent's influence is significant and the US has become more cooperative with Japan's interventions.