Japan's Finance Minister Satsuki Katayama is expected to confirm on Monday that Tokyo and Washington carried out joint intervention in the currency market to halt the yen's slide to 40-year lows, according to two Japanese government officials cited in a Reuters report over the weekend.

The operation would mark the first joint yen intervention since 2011, when the two countries acted together after the yen surged in the aftermath of the Tohoku earthquake — the opposite problem from today's depreciation pressure. The currency is trading at its weakest level against the dollar since 1986. Katayama is likely to stress the determination of both countries to combat what they view as excessive yen weakness. One source told Reuters the operation was "still ongoing" when asked to confirm the joint action.

Japan reportedly bought yen for dollars during New York trading hours on Thursday, with Bank of Japan data suggesting sales of as much as $58.97 billion to support the currency. That initial move came hours before the BOJ's Friday decision to hold policy steady while signalling a strong chance of a rate increase soon. A widening rate gap with a more hawkish Federal Reserve has been a central driver of dollar strength, as higher US yields attract capital into dollar-denominated assets and away from the yen.

The yen spiked again shortly after BOJ Governor Kazuo Ueda's press conference, in what markets suspected was a further round of intervention. Top currency diplomat Atsushi Mimura said he intended to coordinate closely with monetary policy.

The US side of the coordination was also evident on Friday, when the Treasury reportedly told a number of banks it might intervene in the yen market and should stand ready for future action. Treasury Secretary Scott Bessent, who had said the previous week that the yen looked very undervalued, was photographed at a cabinet meeting with a notepad reading "Buy Japanese Yen (JPY) $5-10 bil."

Separately, Japan's Ministry of Finance made a rare English-language post on X stating it had a broad range of tools to address market liquidity needs, including access to the Federal Reserve's repurchase facility, which allows Tokyo to raise dollar liquidity without directly selling US Treasury holdings. That matters because Japan is the largest foreign holder of US government debt, and large-scale selling of Treasuries to fund intervention could itself push up US yields — complicating both countries' policy goals.

The scale of the reported intervention signals a determined effort to defend the currency. Confirmation of joint action marks a significant shift from Japan acting alone — as it did in 2022 and 2024 — and the coordination with Washington, including the Treasury's private warning to banks, suggests markets should expect continued volatility around USD/JPY as authorities test the durability of any bounce.

The BOJ's parallel signal that a rate hike is likely soon adds a monetary policy lever alongside intervention, narrowing the rate differential that has driven dollar strength.

Analysts see the cooperation as partly driven by shared concern over rising US Treasury yields, since a failure to stem yen and Japanese government bond selling could worsen pressure on US debt markets. Former BOJ official Nobuyasu Atago told Reuters that both countries face the risk of inflation running hot and their central banks falling behind the curve, giving them clear incentive to work together.

Japan's Economy Minister Minoru Kiuchi said Sunday the government would step up communication with markets, calling it essential to maintain trust in the country's fiscal sustainability.

With rate policy, intervention, and bilateral coordination now converging, attention turns to Katayama's expected announcement and whether the joint action can durably stabilise the yen.