US and Japan Unite to Support Yen, Halt Currency Plunge

The US and Japan have jointly intervened in currency markets to halt the yen's fall to 40-year lows. The coordinated action, carried out last week, is the first of its kind since 2011.

Japan's finance ministry confirmed the joint operation with the US Treasury, stating that neither side would hesitate to act again. 'We will not hesitate to conduct further joint intervention,' the ministry said.

The yen had slid to levels last seen in 1986, prompting concerns of a sell-off in the currency and Japanese government bonds. Bank of Japan data suggests Tokyo may have sold as much as $58.97 billion buying yen in New York trading on Thursday, before the confirmed joint operation with Washington on Friday.

Nigel Green, chief executive of deVere Group, argued that investors are reading the episode too narrowly. He said years of treating the yen as a cheap and stable funding currency have left portfolios exposed to a reversal, and that anyone holding Japanese equities, bonds or funding trades should reassess.