Overview
- Tokyo and Washington carried out a coordinated yen‑buying intervention on Friday, with officials confirming joint action to counter what they called excessive volatility in the currency.
- Bank of Japan data and market reports show Japan spent tens of billions of dollars buying yen while U.S. officials, linked to roughly $5–10 billion of purchases, used alternative funding channels including Fed facilities.
- The joint move forced the dollar down from near 164 yen to the mid‑150s, easing immediate pressure on import costs in Japan and calming short‑term market stress.
- Policymakers cited a wide interest‑rate gap, heavy carry‑trade funding flows and worries about Prime Minister Sanae Takaichi’s fiscal plans as the main drivers of the yen’s long slide.
- Both countries signalled they stand ready to repeat coordinated action and the Bank of Japan has leaned toward further rate rises, leaving markets alert to follow‑up interventions and possible contagion effects on U.S. yields and global risk assets.