The U.S. decision to join Japan in supporting the battered yen has raised questions about the motivations behind this rare coordinated intervention, with analysts pointing to concerns about U.S. Treasury markets and Japan's financial system.
The yen slid to 163.73 per dollar last Thursday before rebounding to 157.57 on Friday.
This coordinated intervention was the first U.S.-Japan joint operation to buy yen since 1998.
Washington's participation, according to analysts, is linked to concerns that Japan might need to dump large quantities of Treasuries to finance unilateral intervention.
A 'new phase' of U.S.-Japan relationship
President Donald Trump stated that the U.S. participated in last week's coordinated intervention to support the yen as a gesture of support for Japan.
The U.S. and Japan are focused on protecting U.S. bond markets, which also reflects Washington's broader economic and geopolitical priorities.
A 'counterproductive' move?
Reports that the U.S. sold euros rather than dollars to buy yen surprised markets because coordinated interventions have traditionally been funded with dollar assets.
