US and Japan Coordinate Intervention to Support Yen

The United States and Japan conducted a coordinated currency intervention on July 30 to support the Japanese yen. This joint operation challenged previous investor assumptions that yen-buying interventions were merely temporary due to reserve constraints.

Scott Bessent, the U.S. Treasury Secretary, signaled that Washington would not hesitate to participate in further joint interventions to stabilize the currency. This support comes as the yen faces bearish sentiment driven by structural selling flows, perceptions that the Bank of Japan is lagging behind inflation, and fiscal risks associated with the policies of Prime Minister Sanae Takaichi.

Market analysts now view 155 as a critical level for the USD/JPY pair, noting that a drop below this threshold could trigger selling by Japanese exporters and shift market momentum. BofA Global Research maintains a constructive outlook for the currency, forecasting a year-end rate of 152 based on an improving balance of payments and expected interest-rate hikes by the Bank of Japan.