Japan and the US Carry Out a Rare Joint Intervention to Defend the Yen

What Japan's Finance Ministry Confirmed

In a statement issued August 3, 2026, Japan's Minister of Finance, Satsuki Katayama, said that on Friday, July 31 (US Eastern Time), the Ministry of Finance purchased Japanese yen in coordination with the US Department of the Treasury. The statement described the operation as a joint action taken "pursuant to the U.S.-Japan Finance Ministers' Joint Statement" and said it countered "excessive volatility and disorderly movements in the Japanese yen in recent months." The ministry added that it "remains attentive and in close communication" with its US counterparts and "will not hesitate to conduct further joint intervention."

The September 2025 Framework Behind the Move

The legal basis Japan cited for Friday's action is the U.S.-Japan Finance Ministers' Joint Statement issued in September 2025 — an agreement between the two countries' treasury and finance officials establishing how they would coordinate on currency-market stability. Friday's operation is the first publicly confirmed instance of that framework being invoked for an actual joint intervention, rather than just a standing policy commitment. Because the action was described as coordinated rather than unilateral, both governments' finance authorities were involved in the decision and the execution, rather than Japan acting alone with only tacit US awareness, which has been the more typical pattern in past decades.

A New Tool: the Fed's FIMA Repo Facility

Japan's Ministry of Finance said it also plans to use the Federal Reserve's Foreign and International Monetary Authorities (FIMA) Repo Facility going forward. The FIMA facility, established by the Federal Reserve, allows foreign central banks and finance ministries that hold US Treasury securities to temporarily exchange those securities for dollars through a repurchase agreement, rather than selling the securities outright in the market. For Japan, which holds a large stock of US Treasuries as part of its foreign reserves, this gives the Ministry of Finance a way to raise dollars for future yen-buying operations — since a yen-buying intervention requires selling dollars to buy yen — without needing to liquidate its Treasury holdings and without adding selling pressure to the Treasury market itself.

Why a Joint Intervention Is Unusual

Most currency interventions by Japan's Ministry of Finance over the past several decades have been unilateral: Tokyo instructs the Bank of Japan, acting as its agent, to buy or sell yen, without a matching, publicly acknowledged action from Washington. A jointly announced operation — where both Tokyo and Washington confirm they acted together — signals a higher degree of shared concern about currency stability between the two governments than a one-sided move would. US Treasury Secretary Scott Bessent addressed the action in public remarks, saying the coordinated foreign exchange steps "countered disorderly yen movements" and that the Treasury "will not hesitate to participate in further joint intervention." He also said Washington supported Japan's broader effort to correct what officials characterized as significant undervaluation of the yen.

What Comes Next

Both finance ministries have signaled readiness for additional joint action if yen volatility continues, rather than treating Friday's operation as a one-off. The addition of the FIMA Repo Facility as a funding tool suggests Japan is preparing its balance sheet for the possibility of repeated interventions without depleting its Treasury holdings. Markets will be watching both government statements and the Bank of Japan's own policy stance — which has been gradually raising rates through 2026 — for signs of whether currency intervention and interest-rate policy are being used together to stabilize the yen.