U.S. and Japan conduct first joint yen-buying operation since 1998

Rate gaps and Takaichi fiscal concerns limit intervention gains

Japan’s Ministry of Finance said Friday that the country deployed 15.3993 trillion yen, equivalent to about $98.7 billion, in foreign-exchange intervention between July 30 and August 26 to arrest the yen’s slide — a record amount for a single month.

The intervention included a coordinated yen-buying operation with the U.S. Treasury, the first joint action since 1998 carried out to strengthen the Japanese currency. The 2011 U.S.-Japan currency operation moved in the opposite direction: the two countries sold yen to weaken it as part of Japan’s recovery from a massive earthquake. The most recent effort marks the first joint yen-buying operation in more than a quarter-century.

The latest intervention significantly exceeded earlier 2026 spending on currency defense. Japanese authorities deployed 11.7 trillion yen on currency defense during April and May of this year.

The recent intervention briefly pushed the yen into the lower-155 range against the dollar. The currency was last trading around 159.65 to the dollar.

Persistent interest-rate differentials between Japanese and U.S. yields, along with concerns over Prime Minister Sanae Takaichi’s fiscal policy, have limited the currency’s gains, leaving the yen trading well above its late-July nadir near 164 to the dollar.

Finance Minister Satsuki Katayama said Friday that the Japanese government will enhance the yen’s credibility by boosting the country’s long-term competitiveness and potential economic growth. She also emphasized continued cooperation with the U.S. government, saying that coordination on the currency front is “extremely strong.”