Key facts
- Japan and the U.S. conducted a joint currency intervention to support the yen.
- This is the first coordinated action between the two countries since 2011.
- The yen reached a three-month high of ¥155 against the dollar following the intervention.
- President Donald Trump stated Japan sought U.S. assistance for the intervention.
- U.S. Treasury Secretary Scott Bessent indicated willingness for further joint interventions.
The Japanese yen surged to a three-month high against the US dollar after Washington and Tokyo confirmed a rare joint currency intervention late last week. The yen strengthened to ¥155 to the dollar, its highest level since early May, following the coordinated action. This intervention came after the yen had weakened to a 40-year low of almost ¥164 to the dollar last week, prompting a nearly 4% rise in the currency over the past week. President Donald Trump stated that Japan had sought US assistance for the intervention, calling it a "signal of friendship." Japan's Finance Ministry confirmed the intervention, noting coordination with the U.S. Treasury Department, and indicated a willingness to take further action. The yen's weakness in recent months has been attributed to lower Japanese borrowing costs compared to other advanced economies, fueling a carry trade, and concerns over potential fiscal stimulus measures. US Treasury Secretary Scott Bessent reiterated calls for interest rate hikes by the Bank of Japan and stated Washington would not hesitate to participate in further joint interventions. Oxford Economics suggested the intervention might not be enough to reverse the trend of yen weakness but reduces the risk of sharp depreciation, potentially giving the Bank of Japan more time to assess economic conditions.