Bloomberg reported on September 7 that Japan’s Ministry of Finance likely sold some of its U.S. Treasury holdings to fund a record-breaking yen intervention. The move marks an important shift in Japan’s currency intervention strategy and has drawn significant market attention.
The Japanese yen has surged against major currencies as markets widely expect the Bank of Japan to raise interest rates soon, signaling a potential end to decades of ultra-loose monetary policy.
US Treasury Secretary Scott Bessent’s intervention in yen exchange rates has sent shockwaves through global financial markets, signaling what the Financial Times calls a new era of US ‘currency activism’ that breaks decades of non-intervention precedent.
The United States and Japan announced a rare joint intervention in foreign exchange markets to support the weakening yen. Both countries pledged they will not hesitate to conduct further joint interventions if necessary.
Core Summary The Bank of Japan announced on June 16 a 25 basis point rate hike to 1%, the highest level since 1995. The move marks a further tightening of Japan’s decades-long ultra-loose monetary policy as the yen languishes at historic lows. Bitcoin rose following the announcement, as some traders interpret the hike as a signal that the global tightening cycle may be nearing its peak. Event Details The Bank of Japan’s Policy Board made the decision following a two-day meeting. This is the latest in a series of rate increases that began in 2024, when the bank started moving away from near-zero interest rates. The current 1% rate represents the highest level in 31 years, reflecting the bank’s deep concern about persistent inflation. ...