Japan, US Vow Joint Action to Combat Yen Plunge: Finance Minister Set to Announce Currency Market Intervention
Looming Announcement of Joint Currency Operation
Japanese officials have confirmed that the Ministry of Finance is preparing to announce a joint currency market intervention with the United States. This action aims to arrest the significant decline in the Japanese yen, which has been falling toward 40-year lows. Finance Minister Satsuki Katayama is scheduled to make the announcement on Monday.Sources familiar with the matter indicated that Katayama is expected to emphasize the determination of both nations to counter what they view as excessive weakening of the yen. The operation itself remains ongoing, according to one source consulted by Reuters. This intervention marks a significant effort following reported rounds of combined yen-buying in the market.
Details of Intervention and Treasury Action
The joint operation involves coordinated buying of the Japanese yen coupled with selling of the US dollar. Market sources report that this type of intervention is the first undertaken by both authorities since 2011. The move seeks to stabilize the currency after it has dropped significantly against the US dollar, reaching levels not seen since 1986.The coordinated effort followed specific actions taken by Japanese and US financial bodies in recent days. A market source stated that Japan conducted a yen-buying, dollar-selling intervention in New York on Thursday. This action occurred just before the Bank of Japan held its meeting on Friday.
U.S. Treasury Involvement and Market Alert
The intervention is consistent with prior signals from US authorities regarding the currency's valuation. Secretary Scott Bessent had publicly stated last week that he believes the yen appears highly undervalued. A photo obtained by Reuters showed a notepad bearing the instruction "Buy Japanese Yen (JPY) $5-10 bil" in a cabinet meeting setting.Furthermore, on Friday, the US Treasury Department informed multiple banks about potential market action. Banks were directed to stand ready for possible future intervention in the yen market. This buildup of preparatory steps highlights the gravity with which both nations view the currency's trend.
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