Japanese Finance Minister Satsuki Katayama is expected to announce on Monday that Japan and the United States have undertaken joint intervention in the foreign exchange market to halt the yen’s decline to its weakest level in 40 years, according to two Japanese government officials who spoke to Reuters. The move, if confirmed, would mark the first coordinated yen-buying operation by the two countries since 2011 and underscores their shared determination to counter what they view as excessive weakness in the Japanese currency.
Katayama is expected to emphasise that Tokyo and Washington are acting together to address what both governments regard as excessive declines in the yen, the officials told Reuters. Speaking on condition of anonymity because of the sensitivity of the matter, the sources said the intervention remained under way ahead of the anticipated announcement.
One of the officials, when asked by Reuters whether Katayama would formally announce “joint action”, responded affirmatively, adding that “The operation is still ongoing.”
Neither government immediately confirmed the reported intervention. Japan’s Ministry of Finance could not immediately be reached for comment on Sunday, Reuters reported, while officials at the U.S. Treasury did not immediately respond to Reuters’ requests for comment.
The anticipated announcement follows what market sources told Reuters were multiple rounds of coordinated yen-buying by Japanese and U.S. authorities. According to those sources, the intervention is aimed at supporting the Japanese currency after it weakened to its lowest level against the U.S. dollar since 1986. If confirmed, it would represent the first joint currency intervention by Tokyo and Washington since 2011.
A market source told Reuters that Japan’s government carried out yen-buying and dollar-selling intervention during New York trading hours on Thursday. The reported operation came only hours before the Bank of Japan announced on Friday that it would maintain its current monetary policy stance while signalling a strong possibility of an early interest rate increase.
The timing of the reported intervention has drawn particular attention because it coincided with renewed expectations of policy tightening by the Bank of Japan. While the central bank left its monetary settings unchanged, its indication that an interest rate hike could come sooner than previously anticipated has added to efforts aimed at supporting the currency.
Additional signals from Washington have also fuelled market speculation over closer policy coordination between the two governments. U.S. Treasury Secretary Scott Bessent remarked last week that the yen “seems very undervalued to me”, according to Reuters.
Further attention followed a Reuters photograph taken during a cabinet meeting on Friday, showing Bessent with a notepad headed “To Do”, beneath which appeared the handwritten instruction: “Buy Japanese Yen (JPY) $5-10 bil”. The image intensified speculation that U.S. authorities were preparing to participate directly in efforts to stabilise the currency.
Separately on Friday, the U.S. Treasury informed a number of banks that it might intervene in the yen market and instructed them to “stand ready for future action”, a source familiar with the matter told Reuters. That communication, together with the reported market operations and Katayama’s expected announcement, points to what Reuters’ sources described as a coordinated effort by Tokyo and Washington to counter the yen’s sharp depreciation.
Should the announcement proceed as expected, it would formally confirm an exceptionally rare instance of coordinated currency intervention by Japan and the United States, reflecting their shared concern over recent movements in the foreign exchange market and their determination to prevent what they consider excessive declines in the value of the yen.
