USD/JPY declines to approximately 156.45 during the early European session on Monday. Japan and the US have confirmed a joint intervention to buy JPY, indicating the possibility of further actions to stabilise the currency. Trump indicated that discussions with Iran would recommence on Monday following the cancellation of proposed military actions. The USD/JPY pair experiences a decline, approaching 156.45 in the early hours of European trading on Monday. The Japanese Yen climbs amid speculation that Japanese authorities may have intervened to prop up the currency again after coordinated action between the US and Japan last week. Japan’s Finance Minister Satsuki Katayama stated on Monday that Japan and the United States engaged in a coordinated Yen-buying intervention and will not hesitate to implement additional measures, according to source.
Katayama confirmed a rare bilateral action to halt the JPY’s slide to fresh 40-year lows. Meanwhile, US Treasury Secretary Scott Bessent indicated that Washington would not hesitate to intervene in the market once more. US President Donald Trump stated on Sunday that the United States was assisting Japan in stabilising the JPY as a gesture of camaraderie and to support the global economy. “It seems likely that authorities would intervene further in the coming days if the yen begins to unwind the recent move, as was the case in May of this year,” wrote strategists in a note. “We maintain that intervention serves as an effective mechanism for authorities to gain additional time prior to a shift in fundamental factors towards a more favourable position.”
Uncertainty in the Middle East persists at elevated levels, notwithstanding aspirations for a significant development in relations between the US and Iran. Source reported on Monday that Trump indicated a new round of Iran talks would commence Monday afternoon following his cancellation of a planned attack on Iran, a decision influenced in part by appeals from US allies in the Middle East, notably Saudi Arabia. However, Iranian officials stated that Trump’s assertion that Tehran had requested a pause “was nothing but a new lie.” Any indications of a resurgence in tensions in the Middle East may strengthen the Greenback relative to the JPY in the short term.
Strategists observe a shift in official rhetoric towards a more favourable stance on the Yen. They highlight comments from U.S. Treasury Secretary Scott Bessent, who remarked on Thursday that the Japanese Yen “looks very undervalued and should strengthen further,” while also emphasising that “excessive volatility in the currency isn’t healthy.” In their perspective, “reported intervention and a firmer BoJ message could change that quickly.” BNY Mellon posits that a more robust intervention would signal the authorities’ readiness to counteract further depreciation, while more explicit policy guidance would “reduce the credibility discount embedded in JPY assets.”