Overview
- Last week the United States and Japan carried out a coordinated yen-buying intervention to support the currency after it fell to four-decade lows, with Tokyo and Washington executing large market purchases.
- Treasury Secretary Scott Bessent publicly confirmed U.S. participation and pledged to “do whatever it takes” to help stabilise the yen and protect regional economic stability.
- The intervention produced a sharp, short-lived rally that pushed the yen to about 155 per dollar before it drifted back toward roughly 157, leaving the currency steadier but well below pre-crisis levels.
- Currency strategists and Reuters poll respondents say the move is unlikely to deliver a lasting reversal because Japan’s much lower interest rates create a persistent incentive to sell yen; most experts say meaningful BOJ rate hikes would be required for sustained strength.
- Analysts warn the episode could trigger wider spillovers — including carry-trade squeezes or pressures on Japan to use or sell foreign assets such as U.S. Treasuries — and markets will closely watch BOJ decisions, U.S. policy and oil and Middle East developments next.