US, Japan join forces to lift weak yen

The United States and Japan have taken the rare step of jointly buying the Japanese yen to stop its sharp decline, marking their first coordinated currency intervention since 1998. 

The move came after the yen plunged to a 40-year low against the US dollar, raising concerns about financial market stability.

Treasury Secretary Scott Bessent and Japanese Finance Minister Satsuki Katayama confirmed the intervention and warned they are ready to act again if the yen comes under renewed pressure.

President Donald Trump said the decision reflected the strong partnership between the two countries and their willingness to support each other during market volatility.

The intervention quickly boosted the yen, with the dollar falling from nearly 164 yen to around 155 yen. Analysts said the move forced traders to unwind bets that the Japanese currency would continue to weaken.

The yen has struggled this year because US interest rates remain much higher than Japan’s, making the dollar more attractive to investors. 

Rising energy import costs and concerns over the Japanese government’s spending have also weighed on the currency. 

While experts say further intervention is possible, they believe lasting strength for the yen will require stronger economic growth, higher interest rates in Japan, and improvements in the country’s financial outlook.