The United States and Japan just pulled off their first coordinated currency intervention in 15 years. Now they can’t agree on what comes next.
US Treasury Secretary Scott Bessent publicly criticized the Bank of Japan on August 2 for dragging its feet on monetary policy normalization, calling the central bank “behind the curve” on inflation. The comment came hours after Washington and Tokyo jointly intervened to prop up the yen, which had cratered to roughly 164 against the dollar, its weakest level in nearly four decades.
A $36-59 billion Band-Aid
The coordinated intervention, carried out around August 2-3, saw Japan spend an estimated $36-59 billion defending its currency. The US contributed as well, making this the first joint yen-buying operation since 2011, when the two nations teamed up following the Fukushima disaster.
It worked, at least temporarily. The yen recovered to the 155-157 range in the days that followed, pulling back meaningfully from its near-40-year low.
