TOKYO, Aug 4 — Japan stepped into foreign-exchange markets last week to buy yen and sell dollars in what analysts estimate was one of the largest single-day currency interventions on record, as Tokyo moved to halt the yen’s slide to four-decade lows.
Central bank data released Friday pointed to a massive net outflow of roughly 8.45 trillion yen ($53 billion) from money markets, a pattern that typically signals aggressive yen-buying intervention.
The suspected intervention occurred during New York trading hours on Thursday. The dollar plunged against the yen, falling from around 163 to below 158 in a single session — the yen’s biggest single-day gain since December 2023.
Japan’s Ministry of Finance confirmed Monday that it had conducted a coordinated yen-buying operation with the U.S. Treasury on Friday, July 31 (U.S. Eastern Time). “This joint action was taken pursuant to the U.S.-Japan Finance Ministers’ Joint Statement issued in September 2025 and countered excessive volatility and disorderly movements in the Japanese yen in recent months,” Finance Minister Satsuki Katayama said in a statement. Katayama added that Japan “will not hesitate to conduct further joint intervention” and plans to utilize the Federal Reserve’s Foreign and International Monetary Authorities (FIMA) Repo Facility in the future.
The coordinated move marked the first joint U.S.-Japan yen-buying intervention since 1998, according to the Financial Times. The Federal Reserve Bank of New York executed the purchases through Goldman Sachs and Morgan Stanley, selling euros to buy yen.
U.S. Treasury Secretary Scott Bessent confirmed the coordinated action, stating that the U.S. “will not hesitate to continue engaging in joint interventions in the future if necessary.” A Reuters photograph captured Bessent’s notepad at a Camp David cabinet meeting, listing “Buy Japanese Yen (JPY) $5-10 bil” as a to-do item. President Donald Trump said Sunday the U.S. was helping Japan “as a signal of friendship.”
The intervention came after Japan spent a record 11.7 trillion yen (about $73 billion) between late April and early May to slow the yen’s decline. That effort provided only temporary relief, and the currency later touched 163.99 per dollar, its weakest level in about 40 years.
Economists remain skeptical that currency intervention alone can reverse the yen’s trajectory without a fundamental shift in interest-rate expectations. “Japan’s policy mix remains unlikely to generate sustained yen strength,” UBS strategists wrote in a note. Evercore ISI strategists cautioned that FX intervention without interest rate policy support “would probably have a relatively short-lived effect.”
Still, the scale of Thursday’s operation underscores Tokyo’s determination to defend the currency at a time when the Iran war has driven up energy import costs and worsened the cost-of-living squeeze on Japanese households. Traders are now watching whether Japanese authorities will intervene again if the yen resumes its decline.