Japan intervened to buy yen on 30 July, resulting in the first coordinated US-Japan intervention in 28 years. Although the yen temporarily recovered after the intervention, the European side was affected most, raising questions over the sale of euros.
On the night of 30 July, Japan launched an estimated ¥8.45 trillion yen-buying intervention, and the United States joined the following day, resulting in a coordinated US-Japan intervention. The yen strengthened by approximately ¥5, moving from around ¥162.80 to ¥157.80 per dollar, before subsequently showing signs of weakening again. These moves came before the Bank of Japan and the Ministry of Finance had publicly announced the intervention, and related reports were carried by Reuters, the FT and others.
Following the intervention, the effect of correcting the yen's weakness proved short-lived, while opposition and distrust on the European side were reported. European officials in particular described it as "unprecedented" and expressed concern about its impact on cooperation with the ECB. Meanwhile, the US Treasury explained its use of euros as the funding source for yen purchases in terms of consistency with its "strong dollar policy."
The coordination surrounding the US-Japan intervention, both before and after the event, came under scrutiny. According to a Reuters report, prior consultations between the United States and Europe were limited until Japan and the United States formally announced their coordinated intervention on 3 August. Japan's estimated ¥8.45 trillion was treated as the benchmark for the scale of the intervention, while the United States participated by selling euros from its own funds to support the dollar.
Looking ahead, the Bank of Japan's interest-rate policy and fiscal concerns are expected to continue affecting the yen, and it remains unclear whether the yen's decline can be halted completely even when expectations of a rate hike intensify. Statements by Treasury Secretary Bessent and others, as well as the Federal Reserve's policy on using the FIMA Repo Facility, are expected to continue influencing markets through the actions of the US, Japanese and European monetary authorities.