US and Japan take action to prop up yen in rare joint move

Japan and the US have confirmed that they jointly intervened last week to halt a slide in the Yen after it weakened to a fresh 40-year low.The joint intervention is the first since 2011, when both countries took coordinated action to weaken the Yen after the devastating earthquake and tsunami that hit eastern Japan.Both Japan's Ministry of Finance and US Treasury Secretary Scott Bessent have said that they will not hesitate to conduct more joint interventions in the future.It highlights both countries' efforts to prevent a sell-off in the Yen and Japanese government bonds from having an impact on the global economy, including potentially helping to push up borrowing costs for Washington."The United States agreed to participate in the coordinated intervention because it serves its national interests by offering the prospect of significant benefits at a low cost," Shigeto Nagai, head of Japan economics at Oxford Economics told the BBC.The two countries are expected to continue to intervene "intermittently in a coordinated manner for some time", he added."Even if the actual amount of intervention is not particularly large, the prolonged sense of vigilance regarding intervention will be effective in deterring speculators." The Yen is historically weak mainly due to Japan having much lower central bank interest rates than other major economies like the US. That makes the Japanese currency less attractive to international investors.