Key facts
- The U.S. and Japan conducted a coordinated intervention to support the yen.
- Washington lent dollars to Japan using Treasury bonds as collateral.
- This is the first coordinated U.S.-Japan effort to support the yen since 1998.
- The yen surged following the announcement, reaching a nearly three-month high against the dollar.
- Japan's Finance Ministry stated the intervention countered excessive volatility in the yen.
- President Trump described the action as a 'signal of friendship' that would benefit the U.S. and global economy.
The United States and Japan have confirmed a rare, coordinated intervention to bolster the Japanese yen, which had fallen to its weakest level in decades. Washington lent dollars to Tokyo using Treasury bonds as collateral, a move designed to prevent a sell-off of U.S. debt by Japan. President Donald Trump characterized the action as a "signal of friendship" that would benefit the U.S. and the global economy.
Japanese Finance Minister Satsuki Katayama confirmed the joint intervention, stating that the ministry purchased yen in coordination with the U.S. Treasury Department. She added that the action countered "excessive volatility and disorderly movements" in the yen and signaled a willingness to conduct further joint interventions if necessary. U.S. Treasury Secretary Scott Bessent echoed this sentiment, noting the coordinated foreign exchange actions countered disorderly yen movements.
The intervention followed the yen's slide to 163.24 per dollar, its lowest point since 1986, driven by higher U.S. interest rates, rising oil prices, and persistent capital outflows from Japan. Following the announcement, the yen surged, gaining as much as 1.4 percent to reach a nearly three-month high of 155.20 against the dollar. The currency also advanced against the euro and sterling.
Analysts suggest the intervention underscores the resolve of both countries to prevent global spillovers from a potential sell-off in the yen and Japanese government bonds, which could have added pressure to already rising U.S. Treasury yields. The yen's rapid appreciation, however, weighed on the equity market, with the Nikkei share average tumbling after an earlier rise.