Authorities intervened in FX markets to support the yen, marking the first US-Japan joint action in years amid heavy undervaluation.
US and Japanese authorities confirmed joint intervention to strengthen the yen, the first such coordinated effort in years. The move, estimated as the largest single-day intervention to date, signals readiness for further action despite IMF constraints.
The yen remains over 60% undervalued against the dollar based on OECD purchasing power parity, far exceeding the euro’s 29% undervaluation. Analysts suggest US concerns over potential Japanese sales of US Treasuries may have driven participation.
Markets are advised to prepare for additional interventions, though Japan’s Ministry of Finance faces constraints on further action due to depleted reserves.