US-Japan Joint Intervention Bolsters Yen Amid Interest Rate Hopes
The US and Japan have collaborated on a yen intervention to stabilize the currency, which has been under pressure due to its weakened state. The joint effort is seen as effective only if backed by higher interest rates.
The coordination between the two governments began months ago, with shared interests in exchange rate stability driving their efforts. For Japan, a weak yen has driven up import prices and eroded household purchasing power, while for the US, it undermines the effectiveness of import tariffs championed by President Donald Trump.
The US Treasury Secretary Scott Bessent publicly backed a stronger yen, providing Japan with ammunition to counter speculative pressure. The BOJ raised its policy rate to 1% in August, but the move failed to provide lasting support for the yen as Japan's real interest rates remained in negative territory.