# US and Japan Jointly Buy Yen to Halt Its Slide, First Coordinated Intervention Since 2011

The yen strengthened to 157.40 per dollar after the Federal Reserve Bank of New York sold euros for yen on Washington's behalf, days after the currency approached its weakest level against the dollar since 1986.

- Published: 2026-08-02T05:33:05.872Z
- Canonical: https://polylog.news/2026-08-02/us-and-japan-jointly-buy-yen-to-halt-its-slide-first-coordin
- Publisher: Polylog (Global desk)
- Section: macro
- Sources: [Globes (Hebrew)](https://www.globes.co.il/news/article.aspx?did=1001551057#utm_source=RSS), [Nikkei Asia](https://asia.nikkei.com/business/markets/currencies/us-treasury-intervenes-to-support-the-yen-after-japan-steps-in-ft-reports), [CNBC](https://www.cnbc.com/2026/08/01/us-treasury-intervenes-to-support-yen-after-japan-steps-in-ft.html), [Korea JoongAng Daily](https://www.koreajoongangdaily.com/world/us-treasury-buys-up-yen-in-bid-to-bolster-the-battered-japanese-currency/12803276)

The United States Treasury bought Japanese yen on Friday, its [first yen-buying operation alongside Tokyo in more than a decade](https://www.cnbc.com/2026/08/01/us-treasury-intervenes-to-support-yen-after-japan-steps-in-ft.html), after the currency fell close to its weakest level against the dollar since 1986. The Federal Reserve Bank of New York carried out the purchases by selling euros for yen through Goldman Sachs and Morgan Stanley, acting on the Treasury's instruction.

Israeli financial outlet Globes reported that a photograph of Treasury Secretary Scott Bessent showed a [notepad listing an instruction to buy between $5 billion and $10 billion of yen](https://www.globes.co.il/news/article.aspx?did=1001551057#utm_source=RSS), and that Bessent had called the currency significantly undervalued the previous week. By the close of New York trading on Friday, the yen stood at [157.40 to the dollar, its strongest level since early May](https://www.koreajoongangdaily.com/world/us-treasury-buys-up-yen-in-bid-to-bolster-the-battered-japanese-currency/12803276), having traded near four-decade lows only two days earlier. Japanese Finance Minister Satsuki Katayama is expected to [confirm the joint operation on Monday](https://asia.nikkei.com/business/markets/currencies/us-treasury-intervenes-to-support-the-yen-after-japan-steps-in-ft-reports), the first coordinated action by the two governments since 2011.

The intervention addresses a symptom rather than the cause. The yen's long decline followed years of very loose Bank of Japan policy and a widening gap between Japanese and American interest rates, which drew investment out of the yen and into the dollar. Buying the currency on the open market does not narrow that gap. It signals that the strong dollar has reached a level Washington itself now judges disruptive, even as United States data continues to support expectations that the Federal Reserve will keep policy tight.

Coordinated intervention is a rare tool, used only when officials conclude that a currency has moved beyond what economic fundamentals justify and threatens financial stability. That two of the world's largest economies acted together, rather than Japan acting alone, marks a change in how far authorities will go to manage the consequences of diverging monetary policy.

## What this means

A firmer yen raises the cost of the yen-funded carry trade, in which investors borrow cheaply in yen to buy higher-yielding dollar assets, so a sharp reversal can force selling in global equities and bonds as those positions are unwound. Japanese exporters lose the weak-currency advantage that had boosted their earnings. The intervention also signals that the United States no longer welcomes unlimited dollar strength, which limits how aggressively markets can price further Federal Reserve tightening. Investors who treat the dollar as the one dependable reserve currency are reminded that even the officials who manage it will act to weaken it.

## What to watch

- Whether the yen holds below 158 per dollar or weakens back toward its earlier lows, which would show that the intervention failed to change the underlying pressure from the interest-rate gap and that officials must either repeat it or accept the decline.
- Signals from the Bank of Japan on rate increases, since only a narrower gap with United States rates addresses the cause rather than the symptom the intervention treated.
- Whether other large exporters facing a strong dollar, in Asia and Europe, move toward their own interventions, which would mark a wider shift against dollar strength.