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The United States has joined Japan in foreign exchange intervention after the BOJ signaled a possible rate hike in September, according to Kyodo News. This rare coordinated move aims to stabilize the yen amid depreciation pressure against the dollar.
Japan's Ministry of Finance confirmed a record ¥6.28 trillion (about $40 billion) was spent on April 30 to buy yen and sell dollars, marking the largest single-day currency intervention ever. The move was part of a broader intervention campaign as the yen hit a 34-year low against the dollar.
Japan's Finance Minister declined to confirm whether the government intervened in the foreign exchange market on Monday, sparking speculation of potential official action. The silence comes amid significant yen volatility and follows repeated warnings from officials about excessive currency swings.
Japan and the United States have for the first time in 15 years jointly intervened in the foreign exchange market to support the yen, with a commitment to take further action if needed. The move comes as the yen's persistent weakness puts pressure on Japan's import-dependent economy.
US Treasury Secretary Scott Bessent said on August 1 that Washington is not hesitant to intervene in foreign exchange markets together with Japan, amid sharp yen fluctuations. The statement is seen as reassuring markets and could pave the way for joint action to stabilize exchange rates.
Japan is estimated to have spent ¥6–7 trillion on currency intervention to support the yen amid sharp depreciation. The move is seen as one of the largest of its kind, though the finance ministry has yet to confirm official figures. Analysts warn further action may be needed if the yen continues to weaken.
Japanese authorities stepped into the foreign exchange market on July 25, buying yen and selling dollars to counter the currency's slide as it hit 39-year lows. The intervention follows ineffective verbal warnings and marks Tokyo's latest effort to stabilize the currency.
Japan's Finance Minister Satsuki Katayama says the government is ready to act 'decisively' to counter the weak yen as USD/JPY nears 160, a level that previously triggered intervention. She stressed close monitoring and no policy limits in stabilizing the currency.
Japan's Finance Minister reiterated the government's unwavering readiness to take 'decisive' measures against yen volatility. The statement came as the yen continues to weaken, raising import costs and pressuring the economy. Analysts see the comments as a clear signal to markets.
