Yen Gives Back Half of Gains After US-Japan Currency Intervention
The Japanese yen has given back nearly half of its gains from last week's US-Japan currency intervention, as market attention shifts towards monetary policy.
Just a week after a rare coordinated action by the US Treasury and the Bank of Japan, the yen had gained around 3.5% against the US dollar, reaching an exchange rate of 155 per dollar. However, this gain has since gradually weakened, with the yen trading at 158.5 as of Friday.
The intervention was a rare instance of the US Treasury stepping in to support another major currency, and marked a significant shift from the prolonged downward pressure on the yen due to the interest-rate differential between Japan and the US.
US Treasury Secretary Scott Bessent noted that while intervention can provide signals to markets, it is ultimately monetary and economic policy that determines the direction of currencies.