Yen traders are on high alert for additional joint intervention by Japan and the US in currency markets, particularly as trading commences in Asia. This follows coordinated operations in Tokyo and New York last week, which led to a significant rebound in the yen. The initial intervention on Friday saw the yen surge to the lower 157 level against the dollar, with Japanese government sources confirming a yen-buying, dollar-selling intervention.
President Donald Trump confirmed the US participation in the currency-market intervention, stating it was a gesture of friendship towards Japan and an effort to support the global economy. Speaking aboard Air Force One on August 2, Trump emphasized the "good relationship" with the US ally, noting that Japan "wanted a little bit of help, and we're always there for Japan." He further added, "More than anything else, it was a signal of friendship," though he also made a passing reference to Pearl Harbor. This marked the first coordinated intervention by Japan and the US in 15 years.
The intervention came after the yen had weakened to 163.99 to the US dollar on July 23, marking its weakest level in approximately 40 years. This depreciation was partly attributed to concerns over Prime Minister Sanae Takaichi's expansionary fiscal policy. US Treasury Secretary Scott Bessent had a to-do list indicating US purchases of $5 billion to $10 billion worth of Japanese yen. Both Japan's Finance Minister Satsuki Katayama and Bessent indicated that they would not hesitate to conduct further joint interventions to counter disorderly yen movements and excessive volatility. Katayama highlighted that the joint action was consistent with the U.S.-Japan Finance Ministers' Joint Statement from September 2025 and aimed to link Tokyo's "economic security to its unwavering alliance" with Washington.
