On August 2 local time, Reuters reported exclusively from two Japanese government officials that Japanese Finance Minister Koichi Katsumi will announce on August 3 that Japan and the United States have taken joint actions in the foreign exchange market to prevent the yen from falling to its lowest level in 40 years. Sources familiar with the matter said that Katsumi may emphasize the determination of both countries to address what they consider to be excessive depreciation of the yen.
On the day the message was posted, the Japanese Ministry of Finance did not comment immediately on this matter, and officials from the US Treasury Department also did not respond to requests for comments immediately.
Additionally, Bloomberg also quoted an insider as saying that the details of the announcement are still being finalized. Katsumi will announce the news as early as August 3rd morning.
Bloomberg earlier cited a source familiar with the matter, stating that Japanese authorities bought yen and sold dollars during the trading hours in New York on July 31. At the close of trading in New York that day, the yen-dollar exchange rate reached 157.40, the highest level since early May. Just two days prior, the yen exchange rate had been hovering near its lowest point since 1986.
July 31th morning, screen showing the trend of the Japanese yen against the US dollar. Kyodo News
Reports indicate that this strong appreciation of the Japanese yen was driven by multiple factors, including direct purchases of the Japanese yen, calls from officials to banks involved in yen transactions, and verbal interventions by U.S. Treasury Secretary Bennet and Kishida.
On July 31 local time, U.S. President Trump held a cabinet meeting at Camp David in Maryland. During the open filming of the meeting, a Reuters journalist caught a notebook that was open, with the words "To-Do List" written on it, followed by "Buying Japanese Yen worth $5-10 billion." This photo is also considered to represent Bennet's determination to support the Japanese yen.
According to the Nikkei Business News, it is extremely rare for Japan and the United States to intervene in exchange rates at the same time. However, Bessen insisted in an interview with Fox Business Channel on July 30, "The yen seems to be severely undervalued. The market will probably realize that the yen should be stronger." He also said he is not worried about the upward trend of the yen against the US dollar.
