US Dollar Weakens Sharply Against Japanese Yen After Joint Market Intervention

The US dollar has weakened significantly against the Japanese yen after market interventions by both countries. Prior to the intervention, the dollar was trading above 163 yen, but after regulators stepped in, it fell below 160 yen and then to nearly 155.20 yen on Monday. This is a significant drop for the exchange rate.

The joint intervention was confirmed by US President Donald Trump and Japan's finance minister Satsuki Katayama, who said that the finance ministry had purchased yen in coordination with the U.S. Treasury Department. The move is seen as a rare acknowledgment of market intervention, with Neil Newman, managing director and head of strategy at Astris Advisory Japan, noting that it was last seen after a massive earthquake and tsunami disaster in northeastern Japan in 2011.

Trump said that the US helped support the yen because of its good relationship with Japan and to help increase American exports. A weaker dollar makes US-made goods more competitive, reducing their costs in yen terms, and might help increase American exports to Japan. The intervention appears to be having a more durable impact than earlier cases this year, but analysts question if it will be enough to stem the yen's long-term weakness.