US, Japan Ready to Intervene Again to Support Yen

The US and Japan have announced that they are ready to intervene in the foreign exchange market again to support the yen, which has hit a four-decade low. The joint action comes after the yen's value fell to 163.99 per dollar last month, its weakest level since 1986.

In contrast, the US dollar strengthened against the yen on Friday, reaching 157.40, its strongest level since early May. This has sparked speculation of another intervention by Japan and the US.

According to a statement from Japan's Finance Minister Satsuki Katayama, this joint action is aimed at countering excessive volatility and disorderly movements in the Japanese yen in recent months.

The yen has been sliding due to the gap between Japanese and US interest rates, which has fueled the 'carry trade' by investors. This means that investors borrow yen cheaply and invest in other assets outside Japan with better returns, resulting in capital outflows and more downside for the yen.