Japan spent 15.4 trillion yen (96 billion dollars USD) to support the yen from the end of July to the end of August. This became the largest monthly currency intervention in history, according to Japan’s Ministry of Finance on Friday. The Bank of Japan carries out such interventions on behalf of the ministry to limit economic damage from sharp exchange‑rate swings.
The yen weakened because of the interest‑rate gap between Japan and the US, high oil prices, and concerns that Prime Minister Sanae Takaichi’s plans to increase government spending could further strain the country’s already massive debt burden. Data released on Friday show that the interventions took place between July 30 and August 26, though exact dates were not disclosed.
Joint actions with the US and historical precedents
On July 31, Tokyo and Washington carried out their first joint currency intervention in 28 years to support the yen, which had fallen to its lowest level in four decades the day before. US President Donald Trump confirmed the coordinated actions at the start of the month aboard Air Force One, describing them as “a signal of friendship” with Japan and “beneficial for the global economy”.
The yen‑buying operation followed a peak of 163.99 yen per dollar last month—the weakest level since 1986. On July 31 the yen rallied to 157.40 per dollar, its highest rate since early May. By Friday the rate was about 159.6 yen per dollar.
The July intervention was the first since 2011, when the US, Japan and other G7 members sold yen jointly to curb its appreciation after a powerful earthquake. The last time Washington and Tokyo bought yen together was in 1998.
Economic consequences and challenges
Experts say the Trump administration also aimed to narrow the US trade deficit. A weak yen aids Japanese exporters and may help Japan meet its pledge to invest 550 billion dollars in the United States under the 2025 trade agreement.
While a soft yen benefits major exporters such as Sony and Toyota, it raises the cost of imports for resource‑dependent Japan, especially oil. This occurs amid the Middle‑East conflict, which is disrupting energy supplies from the Persian Gulf.
The yen keeps slipping despite earlier interventions and statements by Finance Minister Satsuki Katayama about Japan’s readiness to act. Those remarks were intended to discourage investors from betting on further yen declines.
Source: Barron’s
