US Treasury Signals Readiness for More Coordinated Yen Intervention

U.S. Treasury Secretary Scott Bessent said on Sunday that Washington would not hesitate to conduct further coordinated foreign exchange interventions with Japan if disorderly market conditions persist. The statement follows the first joint U.S.-Japan intervention since 2011, an action aimed at halting the Japanese currency's sharp decline against the dollar.

U.S. Pledges Continued Support

In a post on the social media platform X, Bessent said Friday's joint intervention had successfully countered "disorderly yen movements." He affirmed that the Treasury remains in close contact with Japan's Ministry of Finance (MOF) and the Bank of Japan (BOJ).

"We will not hesitate to participate in further joint intervention," Bessent wrote. The Treasury Secretary also expressed support for expanding the Federal Reserve's Foreign and International Monetary Authorities (FIMA) Repo Facility, describing it as an "important liquidity backstop."

Market Impact and Context

The coordinated action was prompted by the yen's slide to a 40-year low against the U.S. dollar. The intervention triggered a sharp rebound for the Japanese currency, which had fallen under significant selling pressure.

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Key market developments following the intervention include:

• The yen strengthened by more than 2% on Thursday and extended those gains on Friday.
• The currency appreciated to below the 158-per-dollar level.
• By early Monday trading (00:04 GMT), the USD/JPY pair was last quoted at 157.71, according to the source.

Broader Policy Alignment

The intervention received broad support within the U.S. administration. President Donald Trump endorsed the action, telling reporters it was an "act of friendship and economic cooperation between the two allies."

Bessent added that the U.S. "strongly supports" Japan's recent market and monetary policy steps to address what he termed the yen's "substantial undervaluation." The Bank of Japan on Friday kept its short-term interest rate unchanged at 1% but signaled it was prepared to raise rates further if underlying inflation strengthens.