Japan and US in Rare Joint Move to Boost Yen

Japan's Finance Ministry has confirmed a coordinated intervention with the US to buy the yen, following President Donald Trump's Sunday statement that Washington was helping boost the yen as a sign of friendship and to support the global economy.

“Their yen is weakening and they want some help. We always stand by Japan,” Trump told reporters when asked why the US was supporting the currency.

Analysts say the intervention demonstrates both nations' resolve to curb spillover effects from the sell-off in the yen and Japanese government bonds, which could add further pressure on already elevated US Treasury yields.

The US dollar fell 0.2% to 157.07 yen after Trump's remarks, well below the near-164 yen 40-year peak seen late last month, but later rebounded to 157.70 yen following the Japanese Finance Ministry's announcement.

Japan has struggled to stem the relentless slide of its currency, which has pushed up import prices, fueling inflation and hitting household budgets as well as public support for Prime Minister Takaichi Sanae.

In a statement, Japan's Finance Ministry said Friday's yen-buying intervention was coordinated with the US Treasury to “address excessive volatility and disorderly movements in the yen in recent months.”

“The Ministry of Finance remains in close contact and coordination with our counterparts at the US Treasury. We will not hesitate to conduct further coordinated interventions,” the statement read.

This marks the first coordinated intervention since 2011, when the two countries acted together to weaken the yen following the devastating earthquake in eastern Japan.

Data from the Bank of Japan suggests Tokyo may have sold up to $58.97 billion to buy yen during intervention in the New York market on Thursday, ahead of the confirmed coordinated effort with Washington on Friday.

US Treasury Secretary Scott Bessent also confirmed Friday's effort and said Washington “will not hesitate to participate in further coordinated interventions.” “We strongly support Japan's decisive market and currency actions to address the significant undervaluation of the yen,” Bessent wrote on X, reiterating his call for the Bank of Japan to raise interest rates.

Echoing Bessent's repeated calls for rate hikes, the Bank of Japan on Friday sent its strongest signal yet that it may soon raise interest rates, though it left policy unchanged.

In a broader sign of policy coordination, South Korea also intervened to buy the won on Thursday.

Japan had intervened in April and May by buying yen, but the move only provided a brief rebound. The Bank of Japan's rate hike to 1% in June, the highest in 31 years, also failed to support the currency over the long term.