{"id":68190,"date":"2026-08-03T10:36:10","date_gmt":"2026-08-03T10:36:10","guid":{"rendered":"https:\/\/www.europesays.com\/japan\/68190\/"},"modified":"2026-08-03T10:36:10","modified_gmt":"2026-08-03T10:36:10","slug":"how-a-us-japan-pact-to-hit-yen-speculators-came-together","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/japan\/68190\/","title":{"rendered":"How a US-Japan pact to hit yen speculators came together"},"content":{"rendered":"

[TOKYO] A joint US-Japanese effort to fight off speculative bets against a battered yen last week followed months of preparation by the two nations and a rare and public alignment of interests<\/a> in Washington and Tokyo over exchange rates.<\/p>\n

While unilateral efforts by Japanese authorities to stop sharp yen selling in the past have failed to provide a firm floor for the currency, US Treasury Secretary Scott Bessent\u2019s verbal support for a stronger yen<\/a> has given bureaucrats in Tokyo a new tool in their fight this year.<\/p>\n

For Japan, a weak yen has fanned import prices, creating cost-of-living headaches for successive governments, including current Prime Minister Sanae Takaichi\u2019s.<\/p>\n

For the US, a weak yen blunts the trade advantage from President Donald Trump\u2019s flagship tariffs while a related sell-off in Japanese government bonds could spill over to US Treasury yields.<\/p>\n

The shared currency anxiety<\/a> has forged increasingly cosy bilateral conversations about exchange rates, historically a diplomatically thorny topic for the two economic powers, but also added new pressure for the Bank of Japan (BOJ) to persist with rate hikes.<\/p>\n

\"\" US Treasury Secretary Scott Bessent\u2019s verbal support for a stronger yen has given bureaucrats in Tokyo a new tool in their fight\u00a0to stop sharp yen selling. PHOTO: REUTERS <\/p>\n

US participation in yen-buying intervention was considered as early as January, when the New York Federal Reserve made rare rate checks to help Tokyo combat yen declines, said a Japanese government official with knowledge of the preparations.<\/p>\n

\u201cIncluding online meetings, we\u2019ve held talks about 10 times for discussions that included exchange rates,\u201d Japanese Finance Minister Satsuki Katayama said on Monday on how frequently she spoke with Bessent.<\/p>\n

\u201cWhen he visited Japan in May, we talked three-and-a-half hours including over dinner,\u201d she said upon announcing Japan\u2019s joint currency intervention with the US.<\/p>\n

The May talks followed Japan\u2019s huge yen-buying intervention between late April and early May, which failed to reverse the yen\u2019s downtrend.<\/p>\n

SEE ALSO<\/p>\n

\"A<\/a><\/p>\n

In a sign that negotiations were intensifying, Katayama said after the May meeting the two have been \u201ccoordinating very closely on foreign exchange<\/a> and will continue to do so\u201d.<\/p>\n

Bessent, too, said Japan\u2019s fundamentals are \u201cstrong and resilient, and that will be reflected in the exchange rate\u201d.<\/p>\n

He also repeated his calls for faster BOJ interest rate increases, signalling Washington\u2019s concern its slow pace of hikes could leave the central bank behind the curve in addressing inflation.<\/p>\n

A month later, the BOJ raised interest rates to a 31-year high<\/a> of 1 per cent in a landmark step in policy normalisation. But with Japan\u2019s real borrowing costs deeply negative, the move failed to give a lasting boost to the sagging currency.<\/p>\n

The US Treasury was not reachable for comment outside office hours in Washington. Japan\u2019s finance ministry did not comment.<\/p>\n

\u201cLets\u2019 congregate tomorrow\u201d<\/p>\n

With the yen hitting a four-decade low this year, Japan\u2019s top currency diplomat Atsushi Mimura has shifted tactics.<\/p>\n

Instead of a daily stream of calibrated verbal warnings against speculators, Mimura has focused on working behind the scenes with US counterparts, said two sources familiar with the preparations.<\/p>\n

That means Mimura, who has sway over when to step in, has been less public, and kept markets guessing about the chance of intervention. He kept a low profile even as Katayama and Bessent held an online meeting in late June to discuss financial market developments.<\/p>\n

The need for action heightened in July, when concern over Takaichi\u2019s expansionary fiscal and monetary stance<\/a> drove the yen to recent lows, pushing up the cost of imports and hurting the administration\u2019s approval ratings.<\/p>\n

The US administration was also grappling with rising inflation and Treasury yields, heightening the incentive to support Tokyo\u2019s effort to combat market headwinds.<\/p>\n

\"\" Atsushi Mimura, Japan\u2019s top currency diplomat, gave the green light to buy yen for US dollars in the late evening of Jul 30. PHOTO: BLOOMBERG <\/p>\n

Nodding to Japan\u2019s concern over the weak yen, the US Treasury\u2019s semi-annual currency report on Jul 24 echoed Tokyo\u2019s warning against excessive yen volatility and pledged to continue \u201cclose consultations\u201d with Japan on exchange-rate matters.<\/p>\n

Both the US Federal Reserve\u2019s and BOJ\u2019s policy meetings<\/a> last week were seen as potentially vulnerable windows for the yen, as investors positioned themselves based on cues from both banks about the timing of future rate hikes.<\/p>\n

Japan\u2019s intervention campaign was closely coordinated with the BOJ, according to people familiar with the matter.<\/p>\n

Using a speakerphone connected with a handful of staff at the finance ministry\u2019s foreign-exchange division, Mimura gave the green light to buy yen for US dollars in the late evening of Jul 30.<\/p>\n

The move, which hit investors outside Tokyo hours and amid the BOJ\u2019s two-day policy meeting, immediately firmed the yen to 157.80 from around 162.80 against the greenback.<\/p>\n

When one of the staff told Mimura the yen was sliding back down towards 158, he said: \u201cYes. Let\u2019s congregate tomorrow.\u201d<\/p>\n

Shortly after BOJ governor Kazuo Ueda\u2019s news briefing concluded on Friday, the yen spiked in what markets suspect may have been another bout of yen-buying intervention by Tokyo.<\/p>\n

\"\" A notepad in front of Bessent at a Cabinet meeting on Jul 31 read: “To Do Buy Japanese Yen $5-10 bil”. PHOTO: REUTERS <\/p>\n

This time, Tokyo was joined by Washington.<\/p>\n

The US Treasury informed a number of banks that it might intervene in the yen market and that they should \u201cstand ready for future action\u201d, a source had told Reuters.<\/p>\n

Bessent had a notepad at a Friday Cabinet meeting with the words \u201cTo Do\u201d, followed by \u201cBuy Japanese Yen (JPY) $5-10 bil<\/a>\u201d, a Reuters photo showed.<\/p>\n

A September rate hike?<\/p>\n

The BOJ\u2019s communication on its future rate plans last week was its most hawkish to date and crucially nodded to a line in the US Treasury\u2019s currency report that \u201cmonetary normalisation would help reduce excessive exchange-rate volatility\u201d.<\/p>\n

Carefully reading off a prepared script, Ueda emphasised the vigilance needed \u201cmore than ever\u201d against upside price risks; this was read by analysts as all but confirming a September rate hike<\/a>.<\/p>\n

Those sentiments also received praise in Washington.<\/p>\n

\u201cWe strongly support Japan\u2019s decisive market and monetary steps to correct the substantial undervaluation of the yen,\u201d Bessent said in an X post on Sunday, stressing anew his support for higher BOJ rates.<\/p>\n

Mimura, too, said the government will align its currency policy with the BOJ\u2019s monetary policy to address yen weakness, signalling the chance of a near-term rate hike.<\/p>\n

In a separate X post, Bessent said he would meet Ueda at a US-hosted G20 finance leaders\u2019 meeting at the end of August, preceding the BOJ\u2019s next policy meeting on Sep 17 and 18.<\/p>\n

\"\" Japanese Finance Minister Satsuki Katayama has said that she and Bessent are \u201ccoordinating very closely on foreign exchange and will continue to do so\u201d. PHOTO: BLOOMBERG <\/p>\n

Markets now see the BOJ\u2019s September meeting as live.<\/p>\n

\u201cGiven Japan moved to prevent yen falls with the cooperation of the US, there\u2019s a question of whether the BOJ can afford to forgo raising rates in September,\u201d said Yuki Kimura, bond strategist at Okasan Securities.<\/p>\n

Naomi Muguruma, chief bond strategist at Mitsubishi UFJ Morgan Stanley Securities, sees a September hike as a near-given.<\/p>\n

\u201cIntervention only has a temporary effect in slowing currency moves. Faster rate hikes are probably needed to put a lasting floor on the yen,\u201d she said.<\/p>\n

\u201cI feel like a September rate hike is a done deal. It won\u2019t make sense for the BOJ to wait until October and cause another bout of yen declines.\u201d REUTERS<\/p>\n","protected":false},"excerpt":{"rendered":"[TOKYO] A joint US-Japanese effort to fight off speculative bets against a battered yen last week followed months…\n","protected":false},"author":2,"featured_media":68191,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[1300,2091,3074,8,2640,52,1203],"class_list":["post-68190","post","type-post","status-publish","format-standard","has-post-thumbnail","category-tokyo","tag-bank-of-japan","tag-currencies","tag-forex","tag-japan","tag-scott-bessent","tag-tokyo","tag-yen"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts\/68190","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/comments?post=68190"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts\/68190\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/media\/68191"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/media?parent=68190"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/categories?post=68190"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/tags?post=68190"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}