Japan, US Plot Yen Rescue as Speculators Face Reckoning

Japan and the United States are preparing to unveil a joint policy as early as next week to stop speculators from driving the Japanese yen to fresh multi-decade lows.

It would be Washington’s first direct move to support the yen in more than a decade, since coordinated Group of Seven action after Japan’s 2011 earthquake and tsunami.

Japan already tried a record intervention of about 11.73 trillion yen, or roughly $73 billion, in April and May. The yen briefly strengthened before drifting back toward its prior lows, a pattern typical of Japanese interventions when not paired with a lasting shift in interest rate policy.

Bessent has called the yen “very undervalued” and said excessive volatility was unhealthy for markets. His comments, paired with the reported Treasury purchases, signal a rare degree of coordination between the world’s largest and fourth-largest economies on currency policy.

For Japanese households, a stronger yen could ease the sting of high import costs. For American businesses, a steadier yen removes one source of disruption to global capital flows. Japan remains one of the largest foreign holders of U.S. Treasury debt, and officials on both sides have an interest in avoiding disorderly market swings that could trigger unplanned selling.