Coverage spread: 3 sources — 1 left · 2 center
Lean ratings via AllSides / Media Bias-Fact-Check. How this works.
Where they agree
- The US and Japan carried out a rare, coordinated intervention last week to buy yen and stop its slide, confirmed by Japan’s finance ministry.
- The yen had fallen to roughly a 40-year low near ¥163-164 to the dollar before rebounding to the mid-150s after the intervention.
- Multiple analysts across sources (UBS, HSBC, Oxford Economics) doubt the rally will be sustained without deeper Bank of Japan policy changes.
- Reports indicate the US funded its side of the intervention by selling euros rather than dollars, an unusual departure from past joint interventions.
Where they differ
- CNBC focuses heavily on analyst skepticism (UBS, HSBC, ING, Brookings’ Robin Brooks) about the euro-funding decision and its implications for confidence in the yen.
- The Guardian provides more political context, including Trump’s direct quote about helping Japan and details on PM Sanae Takaichi’s stimulus push and criticism of the Bank of Japan.
- The Guardian includes specific dollar figures on intervention size (Bessent’s reported $5-10 billion to-do note, Japan’s $36.58 billion spend) that CNBC omits.
- The Guardian frames this as the first US-Japan joint intervention since the 2011 Tohoku disaster, adding historical context CNBC does not mention.
What happened
The United States and Japan carried out a rare joint currency intervention late last week to halt the yen’s slide, after the currency hit a 40-year low of nearly ¥164 to the dollar. Japan’s finance ministry confirmed on Monday that the two governments had conducted coordinated yen-buying operations and said they would not hesitate to act again. By Monday, the yen had rallied to around ¥155-157 per dollar, its strongest level in three months, before some of the gains faded.
Bank of Japan data cited by Reuters suggested Tokyo spent as much as $36.58 billion on Friday alone buying yen. U.S. Treasury Secretary Scott Bessent said Washington “will not hesitate to participate in further joint intervention” and repeated calls for the Bank of Japan to keep raising interest rates. A photo of Bessent’s notebook from a cabinet meeting, circulated Saturday, reportedly showed a to-do item to buy $5 billion to $10 billion worth of yen. President Trump, asked about the move, said Japan “wanted a little bit of help” and that “we’re always there for Japan.”
Why the yen fell so far
The yen’s weakness has been driven by Japan’s persistently low interest rates compared with other advanced economies, which fueled a “carry trade” in which investors borrow cheap yen to buy higher-yielding dollar assets. Investor unease has also been stoked by Japanese Prime Minister Sanae Takaichi’s push for tax-and-spending stimulus, and by her public criticism of the Bank of Japan for raising rates, which has itself pushed up Japan’s borrowing costs. This is the first joint US-Japan currency intervention since March 2011, when the two countries acted together after the Tohoku earthquake and tsunami — though that earlier episode was aimed at weakening, not strengthening, the yen.
The dollar-versus-euro question
A notable wrinkle in the operation is how the U.S. side funded its yen purchases. Previous joint interventions, in 2022 and 2024, saw the Bank of Japan sell dollars to buy yen. This time, Japan is understood to have followed that same pattern, but the Financial Times reported that the U.S. Treasury instead sold euros to buy yen rather than using dollars — possibly to avoid signaling that Washington wanted a weaker dollar. Analysts flagged this as unusual, since coordinated interventions have traditionally been funded with dollar assets.
Robin Brooks, a senior fellow in economic studies at the Brookings Institution, argued the euro-funding approach could actually undercut confidence in the yen rather than boost it, since it raises questions about why the U.S. didn’t simply fund the purchase with dollars, and may suggest officials were trying to spare Japan from having to sell U.S. Treasurys to pay for its own intervention.
Whether the rally will last
Analysts across several banks were skeptical that the intervention alone would produce a lasting turnaround. UBS strategists Teck Leng Tan and Dominic Schnider wrote that Japan’s broader policy mix is unlikely to generate sustained yen strength, arguing the currency will keep depending more on the threat of future intervention than on improving domestic monetary fundamentals, given the Bank of Japan’s gradual approach to policy normalization and continued negative real interest rates. HSBC said a real shift in the Bank of Japan’s stance — faster rate hikes, a clearer government commitment to the yen, and scaling back fiscal expansion plans — would be needed before a genuine downtrend in the dollar-yen rate could be expected. ING’s Chris Turner noted the dollar’s own resilience partly reflects uncertainty over whether the Federal Reserve will raise rates in September, since higher U.S. rates would draw more international money into Treasurys. Oxford Economics said the coordinated action reduces the near-term risk of a sharp yen slide but expects the Bank of Japan to hold off on its next hike until December. MUFG’s Lee Hardman was more upbeat, saying the mere threat of further joint intervention, combined with a potentially faster pace of Bank of Japan hikes, should discourage speculators from continuing to bet heavily against the yen.
Why this matters
A sustained slide in the yen raises import costs and inflation pressure in Japan and can ripple through global currency and bond markets, given Japan’s role as a major holder of U.S. Treasurys. A joint intervention by two major economies is uncommon, and its use here signals how seriously Washington and Tokyo view the currency’s weakness. But most analysts agree that intervention buys time rather than fixing the underlying problem: the interest-rate gap between Japan and the U.S., and doubts about Japan’s fiscal and monetary policy direction.
Sources
Featured photo: Carol M. Highsmith via Wikimedia Commons (Public domain)