[Explainer] Japan-US Joint Intervention, First in 15 Years: How It Differs from the Exact Opposite Move in 2011

Hey everyone, Hirokichi here.

On July 31, 2026 (US Eastern time), Japan’s government and the Bank of Japan carried out a coordinated foreign exchange intervention together with the US Treasury. A joint yen-buying/dollar-selling intervention like this hasn’t happened in 15 years, and in the “yen-buying” direction specifically, it’s the first in 28 years — a genuinely rare event. In this post I’ll walk through what actually happened, look back at what was going on 15 years ago in 2011, and cover how the exchange rate has moved since the intervention.

What happened? The July 31 Japan-US joint intervention

In late July, USD/JPY had climbed to near 164 yen, its weakest level in roughly 40 years. In response, Japan’s Finance Minister Satsuki Katayama announced on August 3 that “on July 31 (US Eastern time), we carried out a yen-buying intervention in coordination with the US Treasury.” As Japan’s Ministry of Finance and the Bank of Japan sold dollars and bought yen, the US Treasury reportedly also sold euros and bought yen (Nikkei).

According to some reports, Japan’s Ministry of Finance spent roughly $53 billion buying yen in this operation. Minister Katayama also said Japan “would not hesitate to carry out further coordinated intervention,” leaving the door open for additional action.

15 years ago it was the exact opposite: a look back at the 2011 intervention

If you’ve been investing for a while, hearing “coordinated intervention” might bring back memories of March 2011. As it turns out, that intervention moved in exactly the opposite direction from this one.

Right after the Great East Japan Earthquake on March 11, 2011, speculation about insurance payouts being repatriated triggered a rapid wave of speculative yen buying. Early on the morning of March 17, USD/JPY hit 76.25 yen, a record high for the yen at the time (an extremely strong yen). Because an excessively strong yen threatened exporters’ earnings and the pace of earthquake recovery, the G7 (the major seven advanced economies) coordinated on March 18 to intervene by selling yen and buying foreign currency (sources: Wikipedia’s entry on “coordinated intervention,” Jiji Press). As a result, the rate moved back into an 80-83 yen range.

In other words, 2011 was “a yen-selling intervention to stop an excessively strong yen,” while 2026 is “a yen-buying intervention to stop an excessively weak yen” — the goal and the direction were exactly reversed. It’s also worth noting that in the yen-buying direction specifically, this is the first coordinated intervention since the one triggered by the 1998 Asian financial crisis, 28 years ago.

How the rate moved after the intervention: from the 164 range to the 157 range

USD/JPY closed in New York on July 31 at 160.20-160.21. By 9am in Tokyo on Monday, August 3, it had dropped to 157.58-157.59, down 2.62 yen from the previous Friday’s close. Early in the Oceania session, it reportedly dipped briefly below 157.10 (Jiji Press, Minkabu).

Looking at this chart, you can see that from the mid-July level near 164, the rate moved almost 7 yen in the stronger-yen direction in just about two weeks. The rate moved sharply right after the intervention was announced, and it has held in that stronger-yen direction since.

Why did this take the unusual form of a “joint” intervention?

One reason a joint intervention was chosen instead of a solo one is that the yen’s decline had been moving fast, and there were concerns about speculative flows and the risk of a carry trade (borrowing low-interest yen to invest in higher-yielding currencies) unwind. US Treasury Secretary Scott Bessent also signaled he was open to coordinated intervention, and the two countries appear to have aligned on responding to “excessive and disorderly moves” together (Al Jazeera, CNBC).

Compared with a solo intervention, a joint one tends to have a bigger market impact and a stronger deterrent effect on speculators. That’s likely why, even after a 15-year gap for yen-selling interventions and a 28-year gap for yen-buying ones, both countries were able to act together this time. If you’re curious how currency moves like this affect household assets, take a look at our full net-worth disclosure archive as well.

Three things worth watching from here

Looking ahead at USD/JPY, here are three points I’m personally keeping an eye on.

(1) Whether there’s further coordinated intervention: Minister Katayama has explicitly said Japan “would not hesitate” to intervene again, so if speculative yen selling flares back up, another round is possible.
(2) The US-Japan interest rate gap: The underlying driver of yen weakness is still the interest rate differential between the US and Japan. How fast the US cuts rates, and whether the Bank of Japan raises rates, will affect whether the intervention’s impact holds.
(3) Market volatility: Right after an intervention, price swings tend to get choppy, so I’d expect a nervy market for a while yet.

Let’s keep at it, slow and steady. See you next time!

日本語版はこちら → 【解説】日米協調介入は15年ぶり！

* This article is for informational purposes only and does not recommend any specific investment. Please make investment decisions at your own responsibility.

Thanks for reading! If you enjoyed this post, a quick click on the banners below would really encourage me.