Japanese Finance Minister Satsuki Katayama is set to announce on Monday that Tokyo and Washington have undertaken joint action in the currency market to counter the yen's significant decline, which has reached 40-year lows. Two Japanese government officials confirmed this to Reuters, noting that Katayama will emphasize both countries' commitment to combating what they perceive as excessive yen depreciation. One source confirmed that an announcement of "joint action" is forthcoming, adding that the operation is "still ongoing."
This expected announcement follows reports of yen-buying interventions by Japanese and U.S. authorities, marking the first such joint action since 2011. A market source indicated that Japan conducted yen-buying, dollar-selling intervention in New York hours on Thursday. Additionally, a Reuters photo from a Friday cabinet meeting showed U.S. Treasury Secretary Scott Bessent with a notepad indicating a "To Do" item: "Buy Japanese Yen (JPY) $5-10 bil," after he previously stated the yen "seems very undervalued to me."
On Friday, the U.S. Treasury also reportedly informed several banks to be prepared for future action in the yen market. This coordinated effort comes after the Bank of Japan decided on Friday to maintain its monetary policy while signaling a strong possibility of an early interest rate hike. The intervention seeks to boost the Japanese currency from its lowest levels against the dollar since 1986, with some analysts suggesting the U.S. is also concerned about rising Treasury yields that could result from a yen and Japanese government bond selloff if Tokyo failed to stabilize the currency.
