US and Japan Launch Rare Joint Intervention to Support Yen

The US and Japan have made a rare joint effort to support the yen, sparking a reassessment of global capital flow patterns that have relied on low-interest-rate yen funding. This intervention has led some strategists to suggest that it could mark the end of the yen carry trade era and drive deeper shifts in global capital allocation.

US Treasury Secretary Bessent confirmed US participation in supporting the yen, stating that the country will not hesitate to participate in further joint intervention to correct what he described as a severe undervaluation of the yen. President Trump emphasized that the intervention reflects the strength of the US-Japan alliance and expressed expectations that Washington would reap substantial financial benefits from the coordinated action.

The yen strengthened sharply to 157.40 against the dollar in late New York trading, its strongest level since early May. Market analysts point out that this joint action has gone beyond conventional currency management, as Japan may sell foreign exchange reserves to defend its currency, pushing global capital markets into a new normal dominated by liquidity restructuring.