The Japanese Finance Minister declared today that Japan and the United States will take firm action in the foreign exchange market “whenever necessary” after the yen plummeted to near 40-year lows.
“Japan and the U.S. have agreed to take firm measures whenever necessary. In that regard, there are no doubts,” stated Satsuki Katayama, as quoted by the Japanese news agency Jiji Press.
Katayama spoke on Monday with U.S. Treasury Secretary Scott Bessent to discuss the current situation across global financial markets, amid a phase of aggressive yen selling and dollar purchasing fueled by expectations of rising interest rates in the United States.
This momentum drove the Japanese currency to trade around 161.9 yen per dollar on Monday night—a level not seen in two years and extremely close to the historic low recorded nearly 40 years ago of 161.96 yen.
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Following the news this morning that the Japanese minister had met with her American counterpart, the yen briefly strengthened to around 161 yen per dollar, as the market anticipated a potential currency intervention to correct the weakness of the Japanese currency.
The last time Japanese authorities officially confirmed a foreign exchange market intervention was in May, when they purchased 11.73 trillion yen (€63.5 billion) to curb the persistent depreciation of the yen against the dollar.
