U.S. and Japan Coordinate First Joint Currency Intervention Since 2011

The Government of Japan and the United States coordinated a major currency intervention between July 30 and August 1, 2026, to stabilize the yen after it reached 40-year lows. This marks the first joint action between the two nations since 2011. The operation involved direct yen-buying and dollar-selling, with Japan spending approximately 8.45 trillion yen ($52.8 billion) on Thursday. The Federal Reserve Bank of New York reportedly sold euros to buy yen on behalf of the U.S. Treasury, while U.S. Treasury Secretary Scott Bessent planned purchases of $5 billion to $10 billion. South Korea also conducted rare coordinated dollar-selling to support the won during the same period.

The intervention drove the yen from levels near 164 per dollar to as low as 157.40. To reinforce the move, the U.S. Treasury notified banks via the Federal Reserve Bank of New York to remain ready for further action. Japanese diplomat Atsushi Mimura stated that U.S. assistance went "beyond psychological support," referencing preliminary "rate checks" conducted by U.S. authorities.

On July 31, the Bank of Japan maintained its short-term interest rate at 1.00 percent in an 8-1 vote, though board member Takata dissented, arguing for a "nimbler" approach. Despite holding rates, the bank warned that underlying inflation could deviate upward above its 2 percent target and signaled potential rate hikes as early as September to narrow the yield gap with U.S. assets.