Japan and United States conduct first joint yen intervention since 2011

WASHINGTON, United States — Japanese government sources said Finance Minister Satsuki Katayama will announce a coordinated foreign-exchange intervention with the United States to support the yen, which has fallen to a 40-year low against the dollar. The operation, the first joint action between the two countries since 2011, took the form of consecutive yen purchases, including a final round in New York on Thursday. Bank of Japan data put the dollar sales linked to the intervention at approximately $58.97 billion. The move coincided with the Bank of Japan's decision on Friday to leave interest rates unchanged while signaling a near-term rate increase. Officials said the yield gap between U.S. and Japanese assets has been a primary driver of the dollar's rise and framed the intervention as an attempt to offset that gap. Concern over rising U.S. Treasury yields was cited as a factor behind Washington's participation. Officials said a continued slide in the yen could trigger selling pressure in U.S. Treasuries and push yields higher in an unwanted way. Economy Minister Minoru Kiuchi said on Sunday that stronger market communication was needed and reaffirmed concern over rising sovereign bond yields. The U.S. Federal Reserve has activated a repurchase mechanism that supplies temporary dollar liquidity to Tokyo without requiring Japanese sales of U.S. Treasuries, easing Japan's financing burden in future operations.