US Dollar Plunges Against Yen After Joint Intervention by Trump and Japan
The US dollar experienced a significant drop against the Japanese yen following market interventions by both countries. The US dollar had been trading at 40-year highs above 163 yen, but after regulators were suspected of stepping in, it fell below 160 yen.
The prolonged weakness of the yen against the dollar has caused concern for Tokyo, as a weak currency can lead to higher prices and increased inflation due to Japan's high reliance on imports. Efforts earlier this year to raise the value of the yen did little to budge the exchange rate.
US President Donald Trump confirmed that both countries had intervened in markets, stating that 'We have a good relationship with Japan. We're very strong, - very, very strong financially, and they are, you know, they have a weakening yen, and they wanted a little bit of help, and we're always there for Japan.'
The US Treasury Department coordinated the intervention with Japan's finance ministry, which purchased yen to counter excessive volatility in the Japanese currency. Finance Minister Satsuki Katayama issued a statement confirming the intervention, stating that it was necessary to 'countered excessive volatility and disorderly movements in the Japanese yen in recent months.'
The US dollar dropped about 1% to 156.34 yen after the official announcement of the intervention, marking a significant change for the exchange rate.