Trump says Japan wanted U.S. currency intervention to support yen

WASHINGTON (Kyodo) -- The United States recently intervened in the currency market to support the weakening yen at Japan's request, President Donald Trump said Sunday, describing the action as a "signal of friendship" that also benefits the U.S. and global economies.

"Because we have a good relationship with Japan. We're very strong, very, very strong financially. They are, you know, they have a weakening yen, and they wanted a little bit of help," Trump told reporters on Air Force One, when asked why his administration is assisting Tokyo to shore up the currency.

"We're always there for Japan. Japan's been very good to us, with the exception, of course, of Pearl Harbor," Trump said, referring to Japan's 1941 surprise aerial attack on a naval base in Hawaii that resulted in the U.S.'s entry into World War II.

In response to a question about what the United States has gained from such an arrangement on Friday, Trump said, without elaborating, "Financial benefit...it's also good for the world economy."

In late July, the yen fell to its weakest level since 1986, trading at one point very near 164 per U.S. dollar.

After the intervention, which Japanese Finance Minister Satsuki Katayama later confirmed, the yen was briefly traded in the lower 155 range against the dollar on Monday morning in Tokyo.

The yen's recent weakness came amid rising Japanese government bond yields, triggered by market anxiety over Japanese Prime Minister Sanae Takaichi's expansionary fiscal policies.

Some economists have pointed out that the United States is anxious about the future course of the Japanese economy, fearing that a sell-off in Japanese government bonds could intensify selling pressure on Treasuries and cause U.S. interest rates to rise.

The yen's depreciation has also given Japan an advantage in exporting goods to the United States and the rest of the world.

U.S. Treasury Secretary Scott Bessent also confirmed the two countries' currency intervention during New York trading on Friday.

On Sunday, Bessent wrote on social media, "The Trump administration delivers for America's trusted partners. Economic security is national security. And the U.S.-Japan alliance is built on both."

Bessent said the coordinated intervention in the currency market, the first time in 15 years, "countered disorderly yen movements."

"We will not hesitate to participate in further joint intervention," he said, adding the United States plans to encourage the Federal Reserve's foreign and international monetary authorities repo facility "to be upsized" in the months ahead.

The scheme, also known as the FIMA repo facility, enables approved foreign central banks and monetary authorities to temporarily raise dollars by selling U.S. Treasury bonds to the Fed and agreeing to buy them back at the short maturity of a repurchase agreement.

The planned expansion is believed to be part of U.S. support to make it easier for Japan to secure dollar funds for additional yen-buying interventions.

"We strongly support Japan's decisive market and monetary steps to correct the substantial undervaluation of the yen," said Bessent, who believes the yen's sharp fall did not reflect the country's economic fundamentals.

Bessent also reiterated his praise for the Takaichi government, saying it is "moving into an exciting new phase" of Japan's many years of "powerful stimulus (that) have created durable, robust underlying economic dynamics."