US and Japan Collaborate on Currency Intervention to Support Yen
The Japanese government is expected to confirm a joint intervention with the US Treasury to support the yen after it fell to a 40-year low against the dollar. The move, reported to involve purchases of up to ¥8.45tn (£40bn) worth of yen by Goldman Sachs and Morgan Stanley, marks the first such action since 2011. Washington reportedly instructed the Federal Reserve Bank of New York to sell euros and buy yen on Friday in response to Japan's central bank maintaining low interest rates while US borrowing costs remain higher. The intervention temporarily lifted the yen to a three-month high against the dollar, which dropped from ¥164 per USD to around ¥157. The yen has struggled this year due to divergent monetary policies between Japan and other major economies like the US. Despite previous interventions since 2022, efforts have largely failed to halt its decline.
Topics: central bank policy Federal Reserve US-Japan relations yen