US and Japan Team Up to Prop Up Weakening Yen
Japan and the US have confirmed a rare joint intervention to prop up the yen, which has been sliding to 40-year lows. The move is aimed at preventing global spillovers from a sell-off in the yen and Japanese government bonds.
The intervention comes after US President Donald Trump said that Washington was helping to bolster the Japanese currency as a sign of friendship and to support the global economy. 'They have a weakening yen, and they wanted a little bit of help. And we're always there for Japan,' Trump said in response to a reporter's query.
The joint intervention is the first since 2011, when the two countries coordinated an action to weaken the yen after the devastating earthquake in eastern Japan. The Japanese Finance Ministry confirmed the latest move and signalled that Tokyo is willing to take further action if needed. 'The Japanese Ministry of Finance remains attentive and in close communication with our counterparts at the U.S. Treasury,' it said.
The Bank of Japan's June rate hike to a 31-year high of 1 percent has given the struggling currency little lasting boost, but analysts say the intervention underscores both countries' resolve to prevent global spillovers from a sell-off in the yen and Japanese government bonds.