US and Japan stage joint intervention to halt yen's slide; currency recovers from 40 year low to 157 per dollar

The United States and Japan launched a coordinated intervention starting Friday, 31 July 2026 (9 Mordad 1405), to halt the yen's slide, after the currency fell to 163 per dollar for the first time since 1986. According to an Al Jazeera report published Wednesday, 5 August 2026 (14 Mordad 1405), the US Treasury sold euros to buy yen while Japanese authorities bought yen at the same time. Following the move, the yen strengthened to 157 per dollar by Wednesday.

It is the first joint US Japan intervention since the 2011 Tohoku earthquake and tsunami; Washington last supported the yen during the 1998 Asian financial crisis. Analysts say the yen's structural weakness stems from the Bank of Japan's ultra low interest rate policy and from fresh pressure tied to the US Israel war on Iran. Japan's benchmark rate now stands at 1.0 percent, its highest since 1995 but still far below US rates.

Washington's main concern is that a disorderly yen decline could push Japan to sell large amounts of its US Treasury holdings, valued at 1.114 trillion dollars as of May 2026, to raise cash to defend its currency, a move that could push up Treasury yields and the cost of servicing US debt, which already exceeds 39 trillion dollars.