US and Japan Unite to Support Yen Amid Global Market Volatility

The US government has intervened to support the Japanese yen, which had reached a 40-year low against the US dollar at the start of the trading week. The joint operation between Tokyo and Washington aimed to prop up the currency, with estimates suggesting that Japan might have spent as much as $59 billion in the process.

The intervention was triggered by a series of headwinds, including interest rates, the war in Iran, fiscal policy, and inflation. Japanese authorities had warned for weeks that they could take measures to stem the yen's decline, and investors suspected intervention on July 30 when the yen registered a 3 percent gain against the dollar.

Treasury Secretary Scott Bessent confirmed that the US participated in 'coordinated foreign exchange actions' that 'countered disorderly yen movements.' He added that the FIMA Repo Facility is an important backstop, and that the US would encourage it to be upsized in the coming months.