Key Takeaways
Japan's Ministry of Finance confirmed on Monday, August 3 that it intervened jointly with the US Treasury on Friday to buy yen, the first coordinated intervention between the two countries since 2011.
Bank of Japan data suggests Tokyo may have spent about $59 billion on Thursday's round alone after the yen slid to nearly 164 per dollar, its weakest level since 1986.
Finance Minister Satsuki Katayama says Japan will not hesitate to act again with Washington, and the yen strengthened to about 155 after the confirmation.
Japan's finance ministry confirmed on Monday that it bought yen jointly with the US Treasury on Friday, the first coordinated currency intervention between the two countries in 15 years, Reuters reported. The last joint action came in 2011, after the Tohoku earthquake, and that one was designed to weaken the yen, not save it.
The yen touched nearly 164 per dollar last week, its weakest since 1986. Bank of Japan data suggests Tokyo may have spent about $59 billion buying yen in New York on Thursday, and CNBC reports the joint Friday round may have added roughly $36.6 billion more, with the Treasury selling euros to buy yen. After Monday's confirmation the currency strengthened to about 155, its best level since early May.
Finance Minister Satsuki Katayama told reporters Japan will not hesitate to conduct further coordinated intervention. Treasury Secretary Scott Bessent had already said the yen "seems very undervalued," and a Reuters photo from a cabinet meeting caught a handwritten to do list on his desk that read "Buy Japanese Yen (JPY) $5-10 bil." One Japanese official told Reuters the operation is not finished.
The stakes are household level. A weak yen raises the price of everything Japan imports, starting with energy and food, and that squeeze has deepened while the Strait of Hormuz closure keeps oil near $88. The Bank of Japan signaled an early rate hike on Friday after its June increase to 1 percent, the highest in 31 years, and Al Jazeera notes South Korea stepped in to buy its own won on Thursday.
Governments are acting directly in money markets again, and Japan has been rewriting its money rules all year, from reclassifying crypto as financial instruments to defending its currency with the Treasury at its side. US policymakers are working the same territory with the GENIUS Act's stablecoin rulebook. Worth watching whether this marks the turning point Tokyo hopes for.
People Also Ask
Why did the US and Japan intervene in the yen market?
The yen fell to nearly 164 per dollar, its weakest since 1986, driving up Japan's import costs for energy and food and stoking inflation that both governments consider excessive.
When was the last joint US Japan currency intervention?
In 2011, after the Tohoku earthquake. That intervention weakened the yen, which makes Friday's joint yen buying the first coordinated rescue of the currency in 15 years.
How much did Japan spend buying yen?
Bank of Japan data suggests about $59 billion on Thursday, per Reuters, with CNBC reporting the joint Friday round may have added roughly $36.6 billion more.
Will there be more yen intervention?
Finance Minister Satsuki Katayama said Japan will not hesitate to conduct further coordinated intervention, and one Japanese official described the operation as still in progress.
Sources: Reuters, CNBC, Al Jazeera