US and Japan Unite to Support Yen Amid Record Lows
The United States and Japan have jointly intervened in the currency market to prop up the yen, which has been sliding to record lows. This rare bilateral action is aimed at preventing a sell-off in the yen and Japanese government bonds (JGBs) that could cause global spillovers.
The joint intervention was confirmed by Japan's finance ministry on Monday, with Finance Minister Satsuki Katayama saying that both countries 'will not hesitate to jointly intervene again' if necessary. This is the first coordinated action since 2011, when Japan intervened in the market to weaken the yen following a devastating earthquake.
The move is seen as a sign of friendship and cooperation between the two countries, with President Donald Trump saying that the US was helping Japan 'as a sign of friendship' and to help the world economy. The intervention would also help address concerns over the yen's extraordinary weakness, which offsets the boost from Trump's tariffs.
The BOJ is now in the spotlight, with analysts saying that the joint intervention has heightened the chance of a rate hike as soon as its next policy meeting in September. US Treasury Secretary Scott Bessent also confirmed the effort, adding that Washington 'will not hesitate to participate in further joint intervention.'