Japan and the United States announced Monday that they conducted a coordinated intervention last week to counter the yen’s excessive weakness against the dollar, saying they stand ready to intervene again if needed.
With backing from the U.S., currency interventions — whose effects are typically short-lived when conducted alone — could prove more effective and more lasting, analysts said.
The joint intervention aligns with U.S. interests as well, as Washington wants to prevent its trade deficit from widening due to a weaker yen, which recently declined to levels not seen since 1986. The U.S. side also wants to avoid a scenario in which Japan dumps U.S. Treasurys in solo interventions to defend the yen, which would drive U.S. long-term interest rates higher, analysts said.
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