Japan and US to Confirm Joint Action to Support Falling Yen

Japanese Finance Minister Satsuki Katayama is expected to announce Monday that Tokyo and Washington carried out joint action in currency markets to halt the yen’s slide to 40-year lows, according to government officials familiar with the matter. The move marks the first coordinated yen intervention between the two countries since 2011, following the currency’s drop to its weakest level against the dollar since 1986.

Yen-Buying Operations Already Underway

Market sources say Japanese authorities bought yen for dollars during New York trading hours last Thursday, with Bank of Japan data suggesting up to $58.97 billion was sold to support the currency. The intervention came shortly before the Bank of Japan held interest rates steady on Friday while signaling a strong chance of a rate hike soon, as a widening gap with US rates has driven much of the dollar’s strength against the yen.

US Treasury Signals Readiness to Act

The US Treasury reportedly told several banks to prepare for potential future action in the yen market. Treasury Secretary Scott Bessent, who recently called the yen undervalued, was seen with handwritten notes referencing a plan to buy several billion dollars worth of yen.

Concerns Over Bond Yields Add Pressure

Analysts say the joint effort partly reflects shared concern over rising Treasury and Japanese government bond yields, with both countries wary of inflation pressures outpacing their central banks. Japan’s Ministry of Finance also highlighted access to a Federal Reserve liquidity facility as a tool to support intervention efforts without needing to sell off Treasury holdings.