Japan spent a record $96.4 billion (15.4 trillion yen) over the past month to support its national currency, which plummeted to four-decade lows. According to the Japanese Ministry of Finance, these unprecedented interventions took place from July 30 to August 26, showcasing Tokyo’s readiness to adopt an aggressively proactive strategy to stabilize the market.
A key factor in this campaign was support from Washington. On July 31, the two nations conducted their first coordinated currency intervention since 1998. US Treasury Secretary Scott Bessent and his Japanese counterpart, Satsuki Katayama, openly warned speculators against betting against the yen. To enhance the psychological impact, Bessent deliberately allowed journalists to see notes in his notebook indicating a plan to purchase yen worth $10 billion, a figure significantly exceeding US interventions in 1998 and 2011. Later, the American minister publicly supported Tokyo’s actions on the X social media platform.
Despite Japan directing an enormous 27 trillion yen for interventions since the beginning of the year, fundamental pressure on the currency persists. Before the first operation, the exchange rate approached 164 yen per dollar. By August 3, the yen had strengthened to 155.23. However, by Friday evening, it had retreated once again to 159.68 per dollar. Analysts at SMBC Nikko Securities note that although the currency has given up more than half of its gains, the coordinated actions have been remarkably effective. The direct participation of the United States signaled to the market that the financial resources of the authorities are essentially unlimited, leading traders to hesitate in testing the critical threshold of 160 yen.
