US and Japan Stage Rare Intervention to Save Yen from Sliding into Crisis

The US and Japan have intervened in the foreign exchange market to prop up the Japanese yen, which has been declining in value. This is a rare bilateral move, with the last joint intervention occurring in 2011.

President Trump explained that the US was 'always there to help Japan', but this decision may be motivated by concerns about Japan's massive overseas assets, including $1 trillion worth of US Treasury securities. If Japan were to repatriate these funds, it could lead to a significant increase in interest rates and a decrease in bond prices.

Japan's economy is struggling with low productivity, labor shortages, and a sclerotic economic model. The government has already spent $74 billion this year trying to stabilize the currency, but it has only lasted for three weeks.