The United States has joined Japan in a rare coordinated intervention to support the Japanese yen, marking the first joint effort by the two countries to stabilise the currency since 1998.
The move came after the yen plunged to a 40-year low against the U.S. dollar, intensifying concerns over rising import costs, inflation and financial market volatility in Japan. The coordinated intervention helped lift the yen from around 164 per dollar to as high as 155 before settling slightly weaker in Monday trading.
U.S. Treasury Secretary Scott Bessent confirmed that Washington had participated in a foreign exchange intervention alongside Japanese authorities, describing the action as a response to disorderly movements in the currency market. Japanese Finance Minister Satsuki Katayama also confirmed the joint operation and said officials were prepared to intervene again if necessary.
The intervention is unusual because the United States has historically been reluctant to participate in efforts to influence exchange rates, preferring currencies to be determined by market forces. Analysts said Washington’s decision reflects growing concerns that prolonged weakness in the yen could destabilise financial markets and spill over into the global economy.
Japan has spent billions of dollars over the past several years attempting to halt the yen’s decline, but those efforts have had limited success. The currency has remained under pressure due to the wide interest rate gap between Japan and the United States, encouraging investors to shift funds into higher-yielding dollar-denominated assets.
A weaker yen has become a growing political and economic challenge for Tokyo. While it has boosted the competitiveness of Japanese exports and encouraged tourism, it has also driven up the cost of imported food, fuel and raw materials, adding to inflationary pressures for households and businesses.
Market participants said the coordinated action could force investors betting against the yen to unwind their positions, providing temporary support for the currency. However, economists cautioned that intervention alone is unlikely to reverse the broader trend unless Japan also addresses underlying economic factors, including interest rate policy and fiscal concerns.
The intervention also underscored closer economic coordination between Washington and Tokyo at a time of heightened global uncertainty. Both governments indicated they would continue monitoring currency markets closely and would not rule out further action if volatility threatens financial stability.
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Emmanuel Abara Benson is a business journalist and editor covering artificial intelligence, global markets, and emerging technology.
He has previously worked with Business Insider Africa and Nairametrics, reporting on finance, startups, and innovation.
His work focuses on AI, digital economy, and global tech trends.
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