US Joins Rare Currency Intervention with Japan Over Yen's Sharp Decline

The US has joined Japan in a rare currency-market intervention to support the yen, amid concerns that Tokyo might be forced to sell large volumes of US Treasury bonds to fund unilateral action.

Japan has become increasingly worried about the yen's sharp decline, which weakened last Thursday to 163.73 yen per US dollar, its lowest level against the greenback in nearly 40 years, before recovering to 157.57 yen per dollar on Friday.

The joint yen-buying operation marks the first coordinated US-Japan intervention since 1998 and the first joint currency intervention by the two countries since the G7 intervention in 2011.

The focus has turned to the Federal Reserve's FIMA Repo Facility, which allows foreign central banks to access US dollar liquidity by using US Treasury holdings as collateral rather than selling them outright. Japan's Finance Ministry said it planned to use the facility for future currency intervention.