Japan's finance minister is set to confirm Monday that Tokyo and Washington coordinated last week to halt the yen's slide to 40-year lows, marking the first joint intervention between the two countries in 15 years. Bank of Japan data suggests Japan may have sold as much as $58.97 billion to buy yen on Thursday, and the dollar has since pulled back from a near-164 high to around 157.60.
First joint intervention in 15 years
Finance Minister Satsuki Katayama will announce the coordinated action Monday morning, according to two Japanese government officials who spoke to Reuters over the weekend, with one saying the operation was still ongoing. Treasury Secretary Scott Bessent, who has repeatedly pushed for higher Japanese interest rates, had already called the yen undervalued, according to Reuters: "seems very undervalued." A handwritten note Bessent carried into a cabinet meeting also called for buying $5 billion to $10 billion of yen, a Reuters photo showed.
Bank of Japan data indicated Japan may have sold as much as $58.97 billion to buy yen during its intervention in New York markets on Thursday, with another suspected move into the market on Friday. South Korea also bought its own currency, the won, on Thursday, in what Reuters described as a sign of broader coordination.
Yen's slide hits households and approval ratings
The falling yen has been pushing up import prices and feeding broader inflation, hitting Japanese households' finances and Prime Minister Sanae Takaichi's public approval ratings. Japan intervened previously in April and May, buying yen, but those moves produced only a brief rebound.
Rate-hike signal follows dollar's pullback
The Bank of Japan on Friday offered its most explicit signal to date of an early rate hike, even as it kept monetary policy steady. That follows the BOJ's June increase to a 31-year high of 1%, which also gave the currency little lasting boost. The dollar ended Friday trading around 157.60 yen. That is down from the near-164 level it touched earlier in the week, the highest since 1986.
Sources: Economy News, Reuters
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