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US and Japan jointly intervene to halt yen slide
The coordinated action came after the yen hit a fresh 40-year low, with Japan’s finance ministry saying it countered excessive volatility and disorderly moves.
Japan and the US confirmed they jointly intervened last week to stop the yen from sliding further, after it weakened to a new 40-year low. The move marked the first coordinated intervention since 2011, when both countries acted together following Japan’s earthquake and tsunami.
Japan’s finance ministry and US Treasury Secretary Scott Bessent said the two countries would not hesitate to coordinate again, and that they expect to continue intervening intermittently for some time. Japan’s finance ministry said Friday’s action with the US Treasury Department countered excessive volatility and disorderly movements in recent months.
The BBC notes the intervention is aimed at preventing a sell-off in the yen and Japanese government bonds from spreading to the broader economy, including potentially affecting borrowing costs in Washington. Oxford Economics head of Japan economics Shigeto Nagai said the US agreed to participate because it offers significant benefits at a low cost.
The yen has been historically weak, partly because Japan’s central bank rates have been lower than those in other major economies. The Bank of Japan raised its main rate to 1% in June, versus the Federal Reserve’s 3.5% to 3.75% benchmark range, and US comments initially weighed on the dollar before the yen stabilized after Japan’s statement.