US and Japan conduct joint currency intervention to support the Yen at 40-year lows

The United States Treasury and the Japanese government have conducted a rare coordinated currency intervention to support the yen after it hit a 40-year low of 163.24 per dollar on July 21, 2026. The Federal Reserve Bank of New York purchased yen on behalf of the Treasury on July 31, 2026, following unilateral Japanese interventions that potentially reached $58.97 billion. The joint action, the first since 2011, aims to stabilize the yen and prevent disruptive liquidations of U.S. Treasuries.

US-Japan joint yen intervention

• ▪A Reuters photograph of United States Treasury Secretary Scott Bessent's notepad during a cabinet meeting at Camp David on July 31, 2026, showed a handwritten task to buy $5 billion to $10 billion worth of Japanese yen.
• ▪The Federal Reserve Bank of New York sold euros and purchased yen on behalf of the United States Treasury on July 31, 2026, through Goldman Sachs and Morgan Stanley.
• ▪The United States Treasury informed several banks on July 31, 2026, that it could intervene in the yen market and instructed them to stand ready for future action.
• ▪Japanese Finance Minister Satsuki Katayama is expected to announce on August 3, 2026, that Tokyo and Washington jointly intervened in currency markets to prevent excessive declines in the yen.

Yen depreciation to 40-year lows

• ▪Following yen-buying operations from July 30, 2026, through August 1, 2026, the Japanese currency strengthened to the lower half of the 157-yen range against the dollar.
• ▪The Japanese yen hit its weakest level against the United States dollar since December 1986 on July 21, 2026, when it traded at 163.24 yen per dollar.

Bank of Japan policy

• ▪The Bank of Japan policy board voted 8-1 on July 31, 2026, to hold its benchmark interest rate at 1%, with board member Hajime Takata dissenting in favor of raising it to 1.25%.
• ▪Bank of Japan data released on July 31, 2026, indicated that Japan may have sold as much as $58.97 billion to buy yen on July 30, 2026.
• ▪Bank of Japan Governor Kazuo Ueda signaled on July 31, 2026, that an interest rate hike could come as soon as September 2026.

Treasury yield pressure

• ▪Japan's Finance Ministry posted on X that it has access to the Federal Reserve's Foreign and International Monetary Authorities Repo Facility to raise dollar liquidity without selling United States Treasuries.
• ▪Analysts warn that heavy sales of United States Treasuries by Japan to finance yen-buying could trigger a selloff in American government debt and push yields higher.

Currency intervention history

• ▪The coordinated action on July 31, 2026, marks the first joint yen-buying intervention by the United States and Japan since 1998, and their first coordinated currency intervention since 2011.