US Joins Japan in Joint Yen Buying Intervention to Prevent Dollar Contagion

U.S. Treasury Secretary Scott Bessent confirmed on Monday that the Trump administration had joined Japan in its first joint yen buying intervention since 1998. This move is seen as a response to concerns over the potential impact of Japanese selling of dollar-based assets, particularly U.S. Treasury bonds, on the American economy.

The dollar has been gaining strength against the yen in recent months, with the exchange rate reaching nearly 164 yen per dollar, its weakest level in four decades. This has led to concerns over inflation and potential contagion effects on global financial markets.

Bessent's comments suggest that the joint intervention is focused on limiting Japanese selling of dollar-based assets, rather than just helping an ally manage currency volatility. By joining forces with Japan, Washington appears to be taking a proactive approach to mitigate potential risks to the U.S. economy.