Japan and the United States are preparing to announce that they took coordinated action in the currency market to support the yen after the Japanese currency fell to its lowest level against the dollar in 40 years, according to Japanese government sources.
Japanese Finance Minister Satsuki Katayama is expected to announce the joint action on Monday and emphasize that Tokyo and Washington are determined to prevent what they consider excessive declines in the yen.
One source said the operation was still ongoing.
The announcement would mark the first coordinated yen intervention by Japan and the United States since 2011 and could signal a significantly stronger response to the currency’s prolonged weakness.
Market sources said Japanese and US authorities had already conducted several rounds of yen-buying intervention. Japan reportedly bought yen for dollars during New York trading hours on Thursday, with Bank of Japan data indicating the intervention may have involved as much as $58.97 billion.
The move came shortly before the Bank of Japan kept interest rates unchanged on Friday while signaling that an increase could come soon.
A widening interest-rate gap between Japan and the United States has been a major factor behind the yen’s weakness. The Federal Reserve’s increasingly hawkish stance has supported the dollar against the Japanese currency.
The yen surged shortly after BOJ Governor Kazuo Ueda’s press conference on Friday, prompting speculation that Japanese authorities had conducted another intervention.
Japan’s top currency diplomat, Atsushi Mimura, said officials would continue responding in close coordination with monetary policy, suggesting that the Finance Ministry and central bank were working together to support the yen.
Washington also appeared to be preparing for further action. The US Treasury reportedly told several banks on Friday that it could intervene in the yen market and instructed them to be ready for possible future operations.
Treasury Secretary Scott Bessent has previously said the yen appeared significantly undervalued. A Reuters photograph from a Friday cabinet meeting showed a notepad beside Bessent with a handwritten task to buy $5 billion to $10 billion worth of Japanese yen.
The expected announcement also comes as Tokyo seeks to reassure financial markets about its ability to sustain intervention.
Japan’s Finance Ministry made a rare post in English on X saying it had a broad range of tools available to address market liquidity needs, including access to the Federal Reserve’s repurchase facility, which provides temporary dollar liquidity.
That facility could allow Japan to obtain dollars without selling large amounts of its US Treasury holdings. Analysts have warned that heavy sales of Treasuries to finance yen-buying could trigger a selloff in US government debt and push already elevated US bond yields even higher.
The potential coordination between Tokyo and Washington may therefore reflect concerns beyond the yen itself.
Former BOJ official Nobuyasu Atago said both countries faced risks from renewed inflation and could benefit from working together to prevent financial markets from becoming destabilized.
Japan is also increasingly concerned about rising government bond yields at home. Economy Minister Minoru Kiuchi said Sunday that the government would strengthen communication with financial markets, emphasizing the importance of maintaining investor confidence in Japan’s fiscal sustainability.
If confirmed, the joint intervention would represent a major escalation in efforts to stabilize the yen and could test how far Tokyo and Washington are prepared to go to influence global currency markets.