US Treasury Joins Forces with Japan in Historic Yen Intervention
The Japanese Yen has seen significant intervention from both Japan and the US Treasury in recent days. The two governments have jointly bought yen to strengthen its value, marking the first joint JPY buying FX intervention since 1998.
This unprecedented move comes after a sharp decline in USD/JPY below the 158 level. On Friday, media outlets including the FT and Bloomberg reported that the US Treasury sold Euros to buy Yen in an effort to strengthen its value.
Japan's Finance Minister Satsuki Katayama confirmed the joint intervention, stating that both countries will continue to coordinate efforts if necessary. US Treasury Secretary also weighed in, saying that the US aimed to combat 'disorderly' movements in the yen and support Japan's efforts to correct the currency's undervaluation.
Historically, joint JPY interventions have often marked turning points for USD/JPY, but experts caution that the fundamentals driving the market still need time to change. MUFG Research notes that low real interest rates and concerns over Japan's fiscal spending trajectory will likely continue to influence the currency's value.