US Treasury and Japan Team Up on Historic Yen Intervention
The US Treasury and Japanese Ministry of Finance have collaborated on a historic multibillion-dollar intervention to stabilize the plummeting yen, which had reached its weakest level since 1986.
The joint effort was prompted by concerns over global economic stability after the yen breached critical psychological barriers. By late July 2026, it had approached 164 yen against the US dollar, threatening a devastating inflationary spiral in Japan's import-dependent economy.
The operation involved the US selling euros from its strategic reserves to purchase yen on behalf of the Treasury Department. The involvement of the US Federal Reserve Bank of New York provided the Japanese authorities with the necessary firepower to overwhelm market short-sellers.
US President Donald Trump publicly confirmed the American role, describing it as a gesture of economic friendship and a necessary measure to protect the broader global economy from currency contagion.