US and Japan Stage Joint Intervention to Stabilize Yen Amid Fresh Lows
The United States and Japan have confirmed that they conducted a joint intervention to buy yen, aiming to curb its slide to fresh 40-year lows. The move marks a rare bilateral action between the two countries, with last taking place in 2011 after a devastating earthquake in eastern Japan.
The intervention was prompted by concerns over excessive volatility and disorderly movements in the Japanese currency, which has been driven down by rising US Treasury yields and interest rate differentials. The joint effort aims to prevent a sell-off in the yen from causing global spillovers and adding pressure on already rising US Treasury yields.
The BOJ's June rate hike to 1% did little to boost the yen, which has been under downward pressure since April. Analysts say that while the intervention may provide some short-term relief, it will not address the underlying structural factors driving down the currency.