The United States and Japan undertook a rare joint intervention to support the Japanese yen, which had reached a 40-year low against the dollar. This coordinated action, confirmed on Friday, July 31, 2026, and further on Monday, August 3, 2026, aimed to counter excessive volatility and disorderly movements in the currency market. Prior to this joint effort, Japan had already intervened on Thursday, July 30, 2026, selling an estimated $59 billion of US dollars to buy yen.
President Donald Trump confirmed the US participation, stating it was a "signal of friendship" and in the national interest. A notepad belonging to US Treasury Secretary Scott Bessent indicated a plan to "Buy Japanese Yen $5-10 bil." Japan's Finance Minister Satsuki Katayama and Bessent both indicated readiness for further coordinated interventions, with Bessent stating the US "will not hesitate to participate in further joint intervention." The dollar initially fell by 0.2% to 157.07 yen after Trump's comments and further dropped by 0.6% to an intraday low of 156.50 yen on Monday.
Analysts, however, expressed skepticism about the long-term effectiveness of the intervention against structural factors driving yen weakness, such as the rising cost of fuel due to the Middle East conflict and the significant interest rate differentials between Japan and the US. Despite these doubts, the joint intervention was seen as a strong signal of resolve by both countries to prevent market instability. The US also indicated it would consider increasing the Federal Reserve’s repurchase facility, providing temporary dollar liquidity, which could ease funding pressures for Japan's future interventions.
