Japan Confirms Joint US Intervention to Buy Yen, Vows 'No Hesitation' on Further Action

Japanese Finance Minister Satsuki Katayama announced on August 3 that the governments of the United States and Japan jointly intervened in the market to buy yen on July 31.

According to Kyodo News and NHK, Finance Minister Katayama made the announcement via a statement, explaining that this joint intervention was carried out in accordance with the joint statement issued by the US and Japanese finance ministers in September of last year.

Katayama emphasized that the intervention was a "response to the recent excessive fluctuations and disorderly movements of the yen," adding that Japan will maintain close communication with the US and "will not hesitate to take further joint intervention in the future."

In addition, Japan stated that it plans to utilize a facility provided by the US Federal Reserve (Fed), which allows it to secure sufficient dollar funds using US Treasuries as collateral without having to sell its holdings of US Treasury bonds.

If Japan were to sell off large amounts of its US Treasury holdings to raise dollars, concerns would arise over falling US Treasury prices and surging interest rates.

According to Japanese government officials and other sources, US and Japanese authorities unusually intervened in the foreign exchange market on July 31 to correct the weak yen.

It is reported that the Japanese government and the Bank of Japan stepped in to buy yen, while the US Treasury intervened in the market through the Federal Reserve Bank of New York by selling euros and buying yen.

The dollar-yen exchange rate approached 164 yen late last month, sending the value of the yen down to a roughly 40-year low. This is interpreted as a alignment of positions between the US and Japan that such a historic depreciation of the yen needed to be corrected.

(Photo: Yonhap News)
※ Please note: This article was translated by AI and may contain errors.