US and Japan Unite to Rescue Plunging Yen from 40-Year Low

The US and Japan have launched their first joint currency intervention since 2011 to support the plummeting yen. The move aims to reverse a 40-year slide against the dollar, with the Federal Reserve and Bank of Japan working together to aggressively purchase Japanese currency.

The joint action comes as the BOJ's historically loose monetary stance continues to drive international investors away from the yen towards high-yielding dollar assets. Despite raising its main rate to 1 percent in June 2026, the vast yield gap remains a significant concern for Japan's economic stability.

Treasury Secretary Scott Bessent confirmed the joint action on Sunday, stating that the US Treasury Department stands ready to expand the Federal Reserve's Foreign and International Monetary Authorities (FIMA) Repo Facility to provide crucial liquidity backstops. The move aims to introduce extreme risk for hedge funds attempting to short the Japanese currency.