US and Japan Conduct Rare Coordinated Yen Intervention

The United States and Japan conducted a rare coordinated currency intervention on July 31 and August 1, 2026, to stabilize the Japanese yen after it reached 40-year lows near 164 per dollar. The operation involved direct market purchases of the yen and selling U.S. dollars and euros. Japan conducted a record-breaking single-day intervention on July 30, spending an estimated 8.45 trillion yen ($52.8 billion). The U.S. Treasury, acting through the Federal Reserve Bank of New York, sold euros to purchase yen to avoid the appearance of selling the U.S. dollar. Evidence of the plan emerged via a photograph of Treasury Secretary Scott Bessent's notepad at a Camp David meeting, indicating intended purchases of $5 billion to $10 billion.

President Donald Trump described the joint action as a "signal of friendship" that would benefit the global economy. The intervention drove the yen to strengthen to approximately 155.20 per dollar by August 3. To prevent Japan from selling its $1.1 trillion in U.S. Treasuries to fund these operations, the two nations activated the Federal Reserve's Foreign and International Monetary Authorities (FIMA) Repo Facility, allowing Japan to access dollars using bonds as collateral.

While the Bank of Japan maintained short-term interest rates at 1% on July 31, it signaled potential hikes as early as September due to upside inflation risks. Treasury Secretary Scott Bessent and Japanese Finance Minister Satsuki Katayama both confirmed the intervention and stated they would not hesitate to conduct further joint actions to counter excessive volatility.