Japan and US Confirm Joint Yen Intervention, Warn More Action Is Coming

Japan and the United States confirmed on Monday that they carried out coordinated yen buying intervention last week, marking the first joint action of its kind since 2011. Japan’s finance ministry said the move was aimed at stopping the yen’s decline to fresh 40-year lows and preventing spillover effects on global markets, including upward pressure on U.S. Treasury yields.

Officials Signal Readiness for Further Intervention

Finance Minister Satsuki Katayama told reporters that authorities would not hesitate to conduct further coordinated intervention if needed. U.S. Treasury Secretary Scott Bessent echoed that stance, saying Washington supports Japan’s efforts to correct what he called substantial undervaluation of the currency. Following the announcement, the yen jumped more than 1% to around 155.20 per dollar, its strongest level since May.

Bank of Japan Rate Hike Expectations Rise

The joint action increases pressure on the Bank of Japan, which held rates steady last week but hinted at a possible hike at its September meeting. Analysts said the coordinated intervention strengthens the case for near term tightening, with two-year Japanese government bond yields climbing to their highest level since 1995.

Dollar Liquidity Support Also on the Table

Bessent said the U.S. would consider expanding the Federal Reserve’s repurchase facility to give Japan easier access to dollar liquidity, reducing the need for direct Treasury sales during future intervention efforts.