US and Japan Team Up to Prop Up Weakened Yen

The US and Japan have taken joint action to prop up the yen, which had fallen to a 40-year low. This rare move marks the first coordinated intervention between the two countries since 2011, when they worked together to weaken the yen after a devastating earthquake and tsunami.

The Bank of Japan raised interest rates in June to 1%, the highest level since September 1995, while the US Federal Reserve's benchmark rate is currently at 3.50% to 3.75%. This disparity has contributed to the yen's weakness, making it less attractive to international investors.

The joint intervention aims to prevent a sell-off in the yen and Japanese government bonds from having an impact on the global economy. US Treasury Secretary Scott Bessent stated that they will not hesitate to conduct joint interventions in the future, highlighting both countries' efforts to stabilize the currency market.