Why the U.S. stepped in after decades to prop up Japan's yen — and what's at stake
Washington's decision to join Japan in supporting the battered yen has prompted questions over what motivated the rare coordinated intervention.
The U.S. recently joined Japan in a coordinated intervention to support the yen, which has dropped to its weakest level against the dollar in nearly four decades. Analysts suggest that Washington's decision to participate in the rare joint operation was driven by concerns over U.S. Treasury markets and Japan's financial system. The intervention was the first U.S.-Japan joint operation to buy yen since 1998 and the first coordinated intervention involving the two countries since the G7 acted to weaken the yen after the 2011 earthquake.
U.S. officials have stated that the intervention was a gesture of support for Japan and an effort to maintain global economic stability, as the yen is considered substantially undervalued by Washington, providing it an incentive to correct what it sees as an unfair trade advantage.
Brief written by urgent.news from CNBC's own syndicated text. Machine-written — it may contain errors, so check the original before relying on it.
