Japan and The US Bought The Yen To Stop Its Depreciation

Asahi Shimbun reported that Japan and the United States carried out coordinated foreign-exchange intervention to buy yen, citing Japanese government officials.

The intervention aimed to stop the yen’s decline. It said coordinated intervention involving yen buying was the first in 28 years, since 1998, when the Asian currency crisis occurred.

Asahi said Finance Minister Satsuki Katayama is expected soon to state a policy of Japan-U.S. cooperation to correct excessive yen weakness. A photo caption with the article said Katayama responded to reporters at the Finance Ministry in Kasumigaseki, Tokyo.

On July 31 in the New York foreign exchange market, the yen strengthened against the dollar and briefly reached the 157-yen-per-dollar range, Asahi reported. The article said that was the yen’s strongest level in about two and a half months.

Japan’s government and the Bank of Japan moved to conduct yen-buying intervention for a second consecutive day after July 30, and Asahi said it had newly learned that Japan and the United States intervened in coordination. Market participants told Asahi that the U.S. Treasury informed financial institutions on the morning of July 31 of the possibility of foreign-exchange intervention.

Asahi cited the Financial Times as reporting that the Federal Reserve Bank of New York sold euros and bought yen on behalf of the U.S. Treasury through major U.S. financial institutions on July 31. Citing Reuters, Asahi said a memo on the desk of U.S. Treasury Secretary Bessent at a cabinet meeting that day read “Buy Japanese yen (JPY)” and “$5 billion to $10 billion,” an amount Asahi gave as 800 billion yen to 1.6 trillion yen.