The United States has taken a rare step to help Japan strengthen its currency, the Japanese yen. The move comes after the yen fell to its weakest level in 40 years against the US dollar. President Donald Trump described the action as “a signal of friendship.”
“They have a weakening yen, and they wanted a little bit of help. And we’re always there for Japan,” Trump told reporters aboard Air Force One.
The joint intervention happened on Friday. It marked the first time in more than 10 years that the US directly bought Japanese yen. Japan hopes the move will reduce sharp swings in its currency and slow rising inflation caused by expensive imports.
Why Is the Japanese Yen So Weak?
Japan has battled a weak currency for many years. After its economic slowdown in the 1990s, the country kept interest rates very low to support growth. Although Japan raised rates in 2024, they remain lower than those in the United States and Europe. As a result, many investors prefer putting money in countries with better returns instead of Japan.
Higher global oil and gas prices have made things worse. Japan imports most of its energy, so a weak yen makes those imports more expensive. That pushes up the cost of living. Finance Minister Satsuki Katayama said the latest intervention was meant to
“counter excessive volatility and disorderly movements in the Japanese yen in recent months.”
Why Does the US Care?
A stronger dollar may sound good, but it also has drawbacks. American goods become more expensive for buyers in other countries. Supporting the yen could make US exports more competitive while helping Japan reduce inflation.
Treasury Secretary Scott Bessent also signaled that Washington is ready to act again if needed. He said the Treasury Department “will not hesitate to participate in further joint intervention.”
A Reuters photo from a cabinet meeting even showed a note on Bessent’s pad that read,
“Buy Japanese Yen (JPY) $5-10 bil.”
Will This Stop the Yen From Falling?
Experts believe the move may only offer short-term relief. The Bank of Japan tried a similar intervention in April, but the yen soon weakened again. Analysts at Bank of America and Barclays say the latest action could have a bigger impact because both countries acted together.
Still, many believe the pressure on the yen will continue unless Japan raises interest rates further or global economic conditions improve.
For now, the joint intervention sends a clear message that both governments are ready to defend the Japanese currency when needed.
