US and Japan Unite in Yen Intervention Efforts

The US and Japan have jointly intervened in the foreign exchange market to stabilize the yen's value.

The intervention was carried out by the Japanese government through the Bank of Japan, which bought a large amount of yen on the market, while the US Treasury Department conducted a 'rate check' through the Federal Reserve Bank of New York to gauge the liquidity of major banks before intervening in the foreign exchange market.

This rare move has been interpreted as a signal of cooperation between the two countries. Finance Minister Atsushi Mimura said that Japan is receiving support from the US that goes beyond just verbal support, but he refused to comment on whether they would intervene in the foreign exchange market.

The yen surged by 5 yen in an hour after trading near 162.8 yen, and it is believed that hedge funds' net selling positions of the yen were accumulated on a considerable scale, leading to short covering (purchase of selling volume).