Bessent and Japan Confirm Joint Yen Intervention, Signal Readiness for Further Action

US Treasury Secretary Scott Bessent and Japan's Ministry of Finance have officially confirmed that Friday's coordinated foreign exchange intervention was a joint operation between the two countries. Both sides have pledged to act again if needed to counter further disorderly movements in the yen.

Bessent stated that the coordinated actions taken on Friday successfully countered disorderly yen movements, emphasizing that the Treasury remains attentive and in close communication with its counterparts at Japan's Ministry of Finance and the Bank of Japan. He expressed strong support for Japan's decisive market and monetary measures aimed at correcting the substantial undervaluation of the yen.

The Treasury Secretary also highlighted the importance of the Federal Reserve's FIMA repo facility as a structural backstop for these efforts, suggesting that it could be upsized in the coming months.

Japan's Ministry of Finance confirmed that it conducted a coordinated yen-buying intervention with the United States, describing the action as a response to excessive and disorderly moves in the currency. The ministry reiterated its readiness to conduct further foreign exchange intervention alongside Washington if market conditions warrant.

This intervention marks the first joint action since 2011, occurring as the yen reached its lowest levels against the dollar since 1986. Reports indicated that Japan sold approximately $58.97 billion to support the yen during New York trading hours, shortly before the Bank of Japan indicated a strong likelihood of an imminent interest rate increase.

Bessent's endorsement of Japan's monetary steps alongside the currency intervention suggests a coordinated approach, with the narrowing gap between US and Japanese interest rates identified as a key factor in the yen's previous weakness. As both the Treasury and Japan's Ministry of Finance have confirmed their joint action and readiness to intervene again, market participants will be closely monitoring whether the yen can maintain its recent stabilization or if renewed pressure will test the commitment to further intervention in the weeks ahead.