The First US-Japan Joint Yen Intervention Since 2011: What It Means for Rates and the Dollar

Key Takeaways The US Treasury and Japan's Ministry of Finance executed the first joint yen-buying intervention since 2011, after USD/JPY touched 163, its weakest level since 1986. The US reportedly sold euros, not dollars, to fund yen purchases, raising questions about Washington's motives beyond currency stability alone. Japan funds yen-buying by liquidating US Treasuries, adding upward pressure on US yields at a moment when the Fed is already fighting inflation. Without accompanying Bank of Japan rate hikes, history suggests this move fades. The BOJ held policy Friday but signaled a near-term hike is likely. For the first time since 2011, the United States has joined Japan in buying yen. U…