US backs yen in rare joint intervention with Japan, and crypto traders should pay attention

The US Treasury just did something it hasn’t done in 15 years: it bought yen. Working alongside Japanese authorities around July 31 and August 1, the US government stepped into foreign exchange markets to prop up Japan’s battered currency, which had slid to its weakest level against the dollar in four decades. What actually happened The yen had been in freefall. Persistent interest-rate gaps between the US and Japan made it a favorite funding currency for carry trades, where investors borrow cheap yen and park the money in higher-yielding assets. Treasury Secretary Scott Bessent’s notepad, visible during a meeting, referenced potential purchases of $5 billion to $10 billion worth of yen. President Trump publicly confirmed the Treasury’s involvement in stabilizing the currency. Japan, for its part, has been fighting this battle largely alone until now. Japanese authorities have reportedly spent around ¥8.45 trillion, roughly $53 billion, on recent intervention efforts to keep their currency from spiraling further. The joint action with Washington marks the first time both countries coordinated on yen support since the aftermath of the 2011 earthquake and tsunami. The carry trade con...