US and Japan Stage First Joint Currency Intervention in 30 Years, Reshaping Global FX Markets
Digital FinanceGeopoliticsMacro Impact 4
The United States and Japan have conducted a joint currency market intervention to support the yen for the first time since 1998, with a total size of around 87 billion dollars. The US sold euros to buy yen instead of trading directly through the dollar-yen pair. Analysts view this move as turning the yen into a kind of deterrent weapon against speculation, and it reflects how exchange rate policy is becoming more intertwined with geopolitics. The US government under President Donald Trump is ready to support the central banks of countries whose policy stances align with US interests, similar to the case when it helped prop up the Argentine peso in 2025 through a 20 billion dollar swap line from the Exchange Stabilization Fund. Investors are watching the impact on the yen carry trade, which may shift to using other currencies such as the euro as a funding source instead. Going forward, investors must assess government responses to currency moves as an additional key risk beyond economic fundamentals.
