US and Japan Unite to Save Yen from Record Low
The yen has been sliding due to a gap between Japanese and US interest rates, which has led to investors borrowing yen cheaply and investing in other assets with better returns.
This 'carry trade' has resulted in capital outflows and further downward pressure on the yen. To counter this, Japan and the US conducted their first joint intervention in 28 years, buying yen to stabilize its value.
The scale of the operation was not disclosed, but it came after the yen hit a four-decade low of 163.99 per dollar last month. On Friday, it soared to 157.40, its strongest level since early May, prompting speculation of another intervention.
US President Donald Trump described the joint action as 'a signal of friendship' with Japan and 'good for the world economy'. The US Treasury Secretary Scott Bessent said that Washington would not hesitate to participate in further joint interventions if needed.