US and Japan Pledge Joint Yen Intervention to Counter Disorderly Moves

US Treasury Secretary Scott Bessent and Japan's Ministry of Finance have confirmed that their joint yen intervention on Friday was successful in countering disorderly moves in the currency. The intervention, which involved the sale of $58.97 billion in dollars to support the yen, was the first joint operation between the two countries since 2011.

Bessent praised Japan's decisive market and monetary steps to correct the yen's substantial undervaluation, saying that he strongly supports them. He also pointed out that the Federal Reserve's FIMA repo facility is an important backstop supporting the effort, and encouraged it to be upsized in coming months.

The confirmations come as the yen has been under pressure due to the narrowing gap between US and Japanese interest rates, which has weighed on the dollar-yen pair. Bessent said that the Treasury remains attentive and in close communication with its counterparts at Japan's Ministry of Finance and the Bank of Japan, and would not hesitate to participate in further joint intervention if needed.

The commitment from both sides suggests a firm floor under the yen for now, but the durability of the move will depend on whether the BOJ follows through on rate hikes. The yen has been under pressure since it slid to its lowest levels against the dollar since 1986.