The US and Japan jointly intervened to support the yen; Trump attributed this to the good relations between the two countries.

(Washington/Tokyo) U.S. President Donald Trump confirmed on Sunday (August 2) that the United States had intervened to support the yen, stating that the move was out of friendship between the two countries and would also benefit the global economy. Japan and the U.S. said on Monday that they were prepared to intervene again if necessary.

When asked aboard Air Force One why the United States was working with Japan to support the yen, Trump replied, "We have always supported Japan. We have a good relationship with Japan."

Trump believes Washington will gain economic benefits from this move, but "at the end of the day, it's more of a symbol of friendship."

Japanese Finance Minister Satsuki Katayama also confirmed the joint intervention , stating that the Japanese Ministry of Finance, in coordination with the U.S. Treasury Department, bought yen last Friday.

She said, "This is the first time since 1998 that Japan and the United States have taken coordinated intervention measures to buy yen. Naturally, both countries conducted their own assessments and determined that such intervention was indeed necessary, which is why they took joint action."

Satsuki Katayama issued a statement on Monday, noting that the joint action by Japan and the United States had curbed the excessive volatility and disorderly movement of the yen in recent months. She told reporters, "We will not hesitate to take further joint intervention measures."

U.S. Treasury Secretary Bessenter also posted on social media platform X on Sunday, saying that the coordinated foreign exchange intervention measures taken last Friday curbed the disorderly fluctuations of the yen. He indicated that the United States would not hesitate to participate in further joint interventions.

"We strongly support Japan taking decisive market and monetary measures to correct the significant undervaluation of the yen," Bessant said. He added that economic security and the U.S.-Japan alliance were part of the reasons that prompted this action.

Following the joint intervention by Japan and the United States, the yen appreciated by more than 1% against the dollar, reaching 155.20 yen to the dollar, its highest level since early May this year. As for the Singapore dollar, at 4 pm on Monday, it was 122.27 yen to the Singapore dollar.

The yen has been weakening this year. Last month, the yen approached a 40-year low of 164 yen to the dollar. Traders are closely watching for further coordinated intervention from Japan and the US.

Japan has struggled to stem the yen's continuous decline, and Tokyo's unilateral intervention in April and May only resulted in a brief rebound. The Bank of Japan's increase in interest rates to 1% in June also failed to provide a lasting boost to the weak yen.

The depreciation of the yen has driven up import prices and exacerbated inflation, which has not only increased the economic burden on households but also lowered Prime Minister Sanae Takaichi's approval rating .

JPMorgan strategists believe that the U.S. Treasury has limited intervention capabilities because the Exchange Stabilization Fund (ESF) has limited resources and additional funding would require congressional approval.

Analysts question whether the latest round of actions by the US and Japan can reverse the structural factors that have led to the weakening of the yen, such as rising fuel costs caused by the Middle East conflict and the still large interest rate differential between Japan and the US.

Takeshi Ueno, a senior economist at the NLI Research Institute, said that the announcement effect of the joint Japan-U.S. intervention was far greater than the effect of Japan acting alone. "However, the fundamental factors that led to the weakness of the yen have not changed, so this intervention is unlikely to lead to a one-sided appreciation of the yen."

Harumi Rokusha, chief economist at MUFG Morgan Stanley Securities Investment Research Department, believes that the recent weakening of the yen mainly reflects market concerns about Japan's fiscal expansion and the Bank of Japan's lagging monetary policy response.

Foreign exchange market intervention is a short-term measure. To stabilize the yen's exchange rate, adjustments to fiscal and monetary policies are still needed.

Source: [Lianhe Zaobao] (https://www.zaobao.com/news/world/story20260803-9463471)