TOKYO / RankWire.AI / – The U.S. dollar stayed under pressure against the Japanese yen on Tuesday after a sharp reversal in currency markets. The yen traded near 157.35 per dollar during early Asian hours. It had strengthened to about 155.20 on Monday, its highest level since early May. The dollar stood near 164 yen in late July. That shift marked one of the Japanese currency’s strongest short-term gains this year.
Japan’s Ministry of Finance confirmed that authorities bought yen on Friday, July 31, alongside the U.S. Department of the Treasury. Officials said the coordinated action addressed excessive volatility and disorderly currency movements. The ministry did not release the value of the purchases. The operation followed several sessions of rapid changes in the dollar-yen exchange rate. It also marked an unusual joint response by the two governments.
The dollar reached about 163.65 yen on July 30 before dropping quickly. The yen gained almost 4% over the week, its largest weekly rise in two years. It advanced about 5% across three trading sessions. Monday’s move carried the currency to 155.20 before it surrendered part of the increase. Even after that pullback, the yen remained far stronger than its late-July level.
Joint intervention reshapes currency trading
Japan controls foreign exchange policy through its finance ministry, while the Bank of Japan carries out transactions on the government’s behalf. The coordinated purchase was the first joint U.S.-Japan yen intervention in many years. American monetary authorities last took part in yen buying during a Group of Seven operation in 2011. The latest action caused an immediate repricing across major currency markets. Trading volumes increased as the dollar moved away from its recent peak.
The Bank of Japan also kept its overnight policy rate near 1% on July 31. The policy board approved the decision by an 8-1 vote. One member supported an increase to 1.25%. The central bank listed recent yen weakness as an upside risk to domestic prices. It maintained its 2% inflation target and left its broader policy guidance unchanged. The decision came during the same period of intense exchange-rate movement.
Yen holds most of recent advance
By Tuesday, the dollar had recovered from Monday’s low but remained well below its late-July high. The yen was still about 4% stronger than one week earlier. The broader dollar index also traded near a two-month low. The euro stood close to $1.1511, while sterling traded around $1.3427. Japan’s Nikkei 225 share index slipped about 0.3% during the Asian session. Foreign exchange markets remained focused on the dollar-yen pair.
The stronger yen reduced the local cost of dollar-priced imports compared with levels recorded in late July. Japan depends heavily on imported energy, food ingredients and industrial materials. The earlier currency decline had raised costs for many goods purchased in dollars. Tuesday’s rate still remained close to 157 yen per dollar after several volatile sessions. The coordinated intervention defined the latest shift in the U.S. dollar and Japanese yen exchange rate.