Japan and the United States announced on Aug. 2 that they coordinated purchases of the yen on July 31 to curb the currency’s volatility on the currency market.
In a statement, Japan’s Finance Ministry said it coordinated with the U.S. Treasury Department to address “excessive volatility and disorderly movements of the yen” in recent months.
The ministry said it remains in close communication with its U.S. counterparts and “will not hesitate to conduct further joint intervention.”
President Donald Trump told reporters aboard Air Force One on Aug. 2 that the coordination reflected the close relations between the two countries, calling it “a signal of friendship.”
“They have a weakening yen, and they wanted a little bit of help. And we’re always there for Japan. Japan’s been very good to us,” the president said.
Trump said the currency intervention would have financial benefits and is “good for the world economy.”
Treasury Secretary Scott Bessent echoed Japan’s position, saying the United States is prepared to participate in further joint intervention with Japan.
“We strongly support Japan’s decisive market and monetary steps to correct the substantial undervaluation of the yen,” he said in a post on X.
This marked the first joint currency intervention by the two nations in 15 years. In 2011, they coordinated to sell yen to lower its value after a massive earthquake in eastern Japan.
Before late last week, the dollar was trading above 163 yen, touching 40-year highs. After regulators were suspected of stepping in, it fell below 160 yen.
Early Monday, after the official announcement of the intervention, the dollar fell to nearly 155.20 yen. The dollar was trading at 156.75 yen late Monday afternoon Tokyo time.
Japan relies heavily on imports, and the yen’s weakness against the dollar increases the cost of imported goods, driving up consumer prices. The conflict in the Middle East added to those pressures, as disruptions to energy supplies caused by the war drove up oil prices.
In its July 2026 outlook, the BOJ said it expects the year-on-year increase in the consumer price index to accelerate to above 2 percent, as businesses continue to pass on wage increases to selling prices amid high crude oil prices and the yen’s depreciation.
“Japan’s economic growth rate is likely to rise moderately from fiscal 2027 onward, since it is projected that the adverse effects of high crude oil prices will wane and that a virtuous cycle from income to spending will gradually intensify,” the outlook stated.
