US-Japan Joint Yen Intervention Confirmed, Further Action Possible

Japan and the United States have confirmed joint intervention in the yen currency market. This is the first such action since 2011, when a coordinated effort was made to weaken the yen after the devastating earthquake in eastern Japan.

The joint intervention aimed to counter excessive volatility and disorderly movements in the Japanese yen, which has been falling to fresh 40-year lows.

According to a statement from Japan's finance ministry, the US Treasury Department 'will not hesitate to participate in further joint intervention' if needed. This suggests that both countries are committed to preventing a sell-off in the yen and Japanese government bonds (JGB) from causing global spillovers.

The announcement came after US President Donald Trump said on Sunday that the United States is helping Japan to prop up the yen as a sign of friendship and to help the world economy. The US dollar suddenly dropped against the yen on Monday, reversing gains it made earlier in the session after the confirmation from the US and Japan.