Yen strengthens to highest level since May after US intervention

The Japanese yen has surged to its strongest level since early in the year, blowing past the highs set during previous solo interventions by Tokyo. The catalyst: a coordinated yen-buying operation between Japan and the United States, the first time the two nations have jointly stepped into currency markets since 2011. That 2011 playbook was dusted off after the yen cratered to roughly 164 per dollar in July, a 40-year low that had Japanese policymakers reaching for the emergency toolkit. The joint intervention on July 31 pushed the currency back toward 155-156 per dollar, levels not seen since early May. The price tag of fighting gravity Japan’s Ministry of Finance confirmed spending approximately $36.58 billion in the immediate leg of the July operation alone. In the month following the coordinated action, Japanese intervention outlays ballooned to a record $98.7 billion. Factor in earlier operations from the year, and total spending climbed to roughly $170 billion year-to-date. US Treasury Secretary Scott Bessent described the intervention as “decisive,” a notable endorsement given Washington’s historical reluctance to explicitly back currency operations by trading partners. Why ...