Breaking: Japanese Yen rises above 155.50 as Japan announces joint intervention with the US.
- USD/JPY falls to around 155.45 in Monday’s early Asian session.
- Japan's Katayama said officials conducted coordinated yen-purchasing intervention with the US.
- Japan’s Mimura stated that a joint intervention could mark the peak of the US-Japan currency partnership.
The USD/JPY pair tumbles to near 155.45, the lowest since May 6, during the early Asian trading hours on Monday. The Japanese Yen (JPY) attracts some buyers following reports of more joint intervention by the United States (US) and Japan.
Bloomberg reported that Japan’s Finance Minister Satsuki Katayama and US Treasury Secretary Scott Bessent are now working together to a degree unseen in decades to shore up the currency.
Katayama said that Japanese authorities conducted coordinated Yen-buying intervention with the US on Friday, adding that officials will not hesitate to carry out more foreign exchange (FX) intervention with Washington.
Meanwhile, Bessent stated that Friday’s coordinated FX moves curbed disorderly Japanese Yen (JPY) swings. Bessent said that the Treasury will stay vigilant and maintain close communication with counterparts at the Ministry of Finance (MoF) and the Bank of Japan (BoJ).
Early Monday, top foreign exchange official Atsushi Mimura stated that joint intervention could mark the peak of the US-Japan currency partnership.
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
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