Japan and US coordinate $59 billion yen intervention

Japan and the United States conducted a rare coordinated intervention in the foreign exchange markets in late July 2026 to support the Japanese yen. This marks the first joint action of this scale since the 1998 Asian financial crisis. Japanese authorities sold approximately $59 billion in US dollars to combat the yen's rapid depreciation, which had seen the currency fall to nearly 164 per dollar.

The intervention aimed to address the substantial undervaluation of the yen caused by significant interest rate differentials between the Federal Reserve and the Bank of Japan. US Treasury Secretary Scott Bessent characterized the move as a reserve reallocation, while Japanese officials noted the necessity of stabilizing import costs to protect households and businesses from inflation.

While the intervention briefly strengthened the yen to around 157 per dollar, the currency has faced ongoing pressure due to structural economic factors, including Japan's aging population and high energy import costs. The coordinated effort also serves a strategic purpose for the US, potentially preventing a massive sell-off of US Treasuries by Japanese investors seeking to bolster their domestic currency.