Yen Soars as Japan and US Prepare for Joint Intervention

The Japanese yen has been rising against major currencies in thin trading as markets anticipate further joint intervention from Japan and the US. The yen increased by about 0.2% to 157.16 per dollar in early Sydney trading, tracking moves with peers amid a weaker greenback.

US President Donald Trump's decision not to launch fresh strikes against Iran has contributed to the currency's rebound. This comes as Japan's Finance Minister Satsuki Katayama is set to announce on August 3 that the two governments are working together to shore up the yen, according to a person familiar with the matter.

The intervention has already had a significant impact, reversing more than two months of losses in the yen. Goldman Sachs strategists believe authorities will intervene further if the yen begins to unwind its recent move, as was the case in May this year.

Rebecca Patterson, a senior fellow at the Council on Foreign Relations, notes that Japan is already selling Treasuries as part of intervention and warns that this could pose a threat to Treasury yields. Moh Siong Sim, a strategist at Oversea-Chinese Banking, expects USD/JPY to decline below 155 if stop losses are triggered.