US and Japan take action to prop up yen in rare joint move

August 3, 2026

Japan and the United States conducted a rare coordinated currency intervention to stop the yen's decline after it reached its lowest value in four decades. This marked the first joint intervention between the two nations since 2011, when they acted together following Japan's earthquake and tsunami disaster. The yen's weakness stems primarily from Japan maintaining significantly lower interest rates compared to other major economies, which makes the currency less appealing to global investors.

Who is affected

Japan's Ministry of Finance
U.S. Treasury Department and Secretary Scott Bessent
Bank of Japan
International currency speculators
International investors in Japanese yen
U.S. government (regarding borrowing costs)
Japanese Prime Minister Sanae Takaichi
President Donald Trump's administration

What action is being taken

Japan and the U.S. are jointly intervening in currency markets to support the yen
Tokyo is selling U.S. dollars to purchase yen (sold approximately $59 billion on Thursday)
The U.S. is buying Japanese yen ($5-10 billion noted)
Both countries are conducting coordinated foreign exchange actions to counter disorderly yen movements

Why it matters

This intervention is significant because it prevents a yen sell-off and potential instability in Japanese government bonds from negatively affecting the global economy. The coordinated action could help prevent rising borrowing costs for the U.S. government. The prolonged intervention creates vigilance that deters currency speculators from further destabilizing the yen. It also demonstrates strong international cooperation between two major economies to address currency volatility that could have widespread economic consequences.

What's next

Both countries are expected to continue intervening "intermittently in a coordinated manner for some time"
Japan's Ministry of Finance and U.S. Treasury Secretary have stated they will not hesitate to conduct more joint interventions in the future

Read full article from source: BBC