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Japan's Finance Ministry confirmed it spent a record ¥15.4 trillion ($96 billion) in July–August to buy yen, including a coordinated intervention with the U.S. Analysts say the effect may be short-lived as policy divergence persists between the Bank of Japan and the Federal Reserve.
The yen is heading for its worst week in three months as the impact of US-Japan intervention fades, leading investors to anticipate further official action. Analysts point to the interest-rate gap and persistent selling pressure, with traders scanning for signs of new intervention.
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.
The US dollar dropped below 156 yen on July 29 after Japan and the US confirmed coordinated intervention to support the yen. Analysts warn the impact may be temporary without further action or Fed policy shifts.
Japan's top currency official said on August 1 that he agrees with the BOJ's stance as markets watch for possible intervention. The comment came amid sharp yen swings and repeated warnings from authorities about taking action against excessive market moves, highlighting close coordination between the Finance Ministry and central bank.
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 the US 'strongly' supports Japan's measures to correct the yen's undervaluation, signaling closer policy coordination. The endorsement comes amid persistent yen weakness and market volatility, with investors viewing it as a positive sign for potential joint action.
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.
