Japan: Coordinated Dollar Sales Lift Yen 2.4%

Japan and South Korea sold billions of dollars in the New York session to arrest currency slides, marking rare simultaneous intervention. USD/JPY dropped 2.4 percent, the largest single-day decline since January 2023, while the won climbed 2 percent to a nine-month high.

US authorities ran rate checks on the yen, a precursor step that historically precedes joint action. Treasury Secretary Scott Bessent called the yen undervalued, and Japan's top currency official confirmed Washington support beyond words. Coordinated moves have succeeded only five times since the 1985 Plaza Accord; solo Japanese efforts in 2022 and 2024 failed after days.

Yen strength now threatens leveraged positions. The yen carry trade unwind impact on Bitcoin and crypto markets surfaced in August 2024 when a small rate hike sent BTC from 64,000 dollars to 49,000 dollars in six days. Continued dollar weakness, with DXY below 100, could redirect capital toward hard assets if Washington escalates from checks to actual sales.