US-Japan Yen Intervention Tied to Broader Trade Strategy

The recent coordinated intervention by the US and Japan to support the Japanese Yen is part of a broader US trade strategy, according to Societe Generale's Kit Juckes.

Japan seeks to stabilise the Yen and contain import prices, but for the US, supporting the Yen is about limiting Dollar appreciation versus key Asian trade partners whose currencies have weakened significantly in real terms.

The US has a big picture in mind, as it aims to prevent further dollar appreciation relative to its biggest groupings of trade partners. Japan, China, and South Korea account for around 18% of US trade, compared to around 16% for the Eurozone.