Japan's finance minister is set to confirm Monday that Tokyo and Washington intervened jointly in the currency market last week, the first coordinated action on the yen in 15 years. Bank of Japan data suggest Tokyo alone sold as much as $58.97 billion buying yen, while President Trump has framed Washington's role as both a favor to Japan and a financial benefit for the US.
Finance Minister Satsuki Katayama is set to tell reporters Monday morning that Tokyo and Washington acted together in the currency market last week — the first joint intervention on the yen in 15 years — to arrest what the two governments consider excessive declines. Two Japanese government officials told Reuters over the weekend that the effort was continuing, with one describing the operation as still in progress.
The currency's relentless decline pushes up import prices and stokes inflation, squeezing households and weighing on Prime Minister Sanae Takaichi's approval ratings.
Japan sold as much as $58.97 billion defending the yen
Bank of Japan data indicate Tokyo may have sold as much as $58.97 billion to buy yen when it intervened in New York markets on Thursday, followed by another suspected move on Friday. Treasury Secretary Scott Bessent, who has called the yen undervalued, carried a handwritten to-do list into a cabinet meeting that said to buy $5 billion to $10 billion in yen, a Reuters photograph showed.
The Bank of Japan on Friday gave its most explicit signal yet of an early rate hike, even as it kept policy steady. South Korea separately intervened to buy its own currency, the won, on Thursday, a sign of broader policy coordination.
Trump ties the support to a financial benefit for the US
President Trump said Sunday the US is helping Japan prop up the yen as a sign of friendship and to support the world economy: "They have a weakening yen, and they wanted a little bit of help." The dollar fell 0.2% to 157.07 yen after his remarks.
Trump added that the US is also drawing a financial benefit from the arrangement, though he did not detail how that benefit is being realized.
The yen remains far from its four-decade high
The dollar ended Friday trading around 157.60 yen, having retreated from near 164 yen — the highest level since 1986 — hit earlier in the week. Tokyo intervened previously in April and May, buying yen, but those moves produced only a brief rebound, and the Bank of Japan's June rate hike to a 31-year high of 1% also failed to deliver a lasting boost.
Sources: CNBC, Economy News, Investinglive
Trading involves risk.
Risk Disclaimer
