According to Kyodo News, multiple Japanese government officials disclosed on August 10 that the US and Japanese governments carried out an unusual joint yen-buying intervention on July 31, US Eastern Time — the first such action in 28 years. The decisive factor, they said, was Bank of Japan Governor Kazuo Ueda's strong hint at his press conference that day that policy rates would be raised as early as September and beyond. Ueda explicitly said the BOJ would "accelerate the pace of rate hikes" if necessary. The US gave a positive assessment, and the two governments aligned on preventing excessive yen depreciation. The officials said Washington is concerned that Japan's delayed rate hikes have left the yen too weak, fueling further price increases and higher long-term interest rates that could ripple across global financial markets. A senior Japanese government official said Ueda's remarks were highly persuasive to the US, and that the BOJ has no choice but to raise rates at its September 17-18 policy meeting.
Japanese government officials said the US and Japanese governments carried out an unusual joint yen-buying intervention on July 31, US Eastern Time — the first such operation in 28 years, Kyodo News reported.
Multiple Japanese government officials disclosed the intervention on August 10. They pointed to Bank of Japan Governor Kazuo Ueda's press conference that day as the decisive factor. Ueda strongly hinted that policy rates would be raised as early as September and beyond, explicitly saying the BOJ would "accelerate the pace of rate hikes" if necessary.
The US side gave a positive assessment of Ueda's signal, and both governments moved in step to prevent the yen from depreciating excessively. Washington is concerned that Japan's delayed rate hikes have already left the yen too weak, fueling further price increases and rising long-term interest rates that could ripple across global financial markets.
"Ueda's remarks were highly persuasive to the US side," a senior Japanese government official said. "At the same time, this means the Bank of Japan has no choice but to raise rates at its next policy meeting (September 17-18)."
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