Japan and the U.S. confirmed a rare joint intervention to buy yen in order to stop the Japanese currency’s slide to 40-year lows. President Donald Trump had announced the move in a statement on Sunday, following which the Japanese Ministry of Finance also confirmed the intervention.
“They have a weakening yen, and they wanted a little bit of help. And we’re always there for Japan,” Trump said in response to a reporter’s query about why the U.S. is helping to support the currency.
The yen rose after the announcement, leaving traders on high alert for further intervention from authorities. The Japanese currency gained as much as 1.4 percent to hit a nearly three-month high of 155.20 per U.S. dollar, compounding a 3.8 percent surge over the previous two sessions. The yen also broadly advanced against other major currencies like the euro and the sterling.
Analysts say the intervention underscores both countries’ resolve to prevent global spillovers from a sell-off in the yen and Japanese government bonds, including by adding pressure on already rising U.S. Treasury yields.
Japan has been struggling to deal with a drop in the currency that has caused a rise in import prices and stoked broader inflation. In a statement, Japan’s Finance Ministry said Friday’s yen-buying intervention with the U.S. Treasury Department “countered excessive volatility and disorderly movements in the Japanese yen in recent months.”
“The Japanese Ministry of Finance remains attentive and in close communication with our counterparts at the U.S. Treasury,” the statement said. “We will not hesitate to conduct further joint intervention.”
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According to Al Jazeera, the joint intervention is the first since a 2011 coordinated action to weaken the yen after the devastating earthquake in eastern Japan.
U.S. Treasury Secretary Scott Bessent also confirmed Friday’s effort, noting on Sunday that Washington “will not hesitate to participate in further joint intervention.”
“We strongly support Japan’s decisive market and monetary steps to correct the substantial undervaluation of the yen,” Bessent said on X.
Earlier this year, the U.S. welcomed a $36 billion Japanese investment in oil, gas and critical minerals. The commitment was the first tranche of investments by Japan following a landmark trade deal between the two countries, one in which Tokyo pledged to invest $550 billion in American-based projects and Trump cut tariffs on most Japanese imports to 15%.