US Supports Yen in Broader Trade Strategy with Asia

The recent coordinated intervention by the US and Japan to support the Japanese Yen has sparked interest in the foreign exchange market.

According to Societe Generale's Kit Juckes, drawing on Scott Bessent's perspective, this action is part of a broader US trade strategy aimed at limiting Dollar appreciation versus key Asian trade partners whose currencies have significantly weakened in real terms.

The choice of supporting the Yen, Japan seeks to stabilise its currency and contain import prices, while for the US, it's about keeping the dollar down against one of its biggest groupings of trade partners. Japan, China, and South Korea together account for around 18% of US trade, compared to around 16% for the Eurozone.