Yen Surges as US and Japan Confirm Joint Currency Intervention

The Japanese yen strengthened significantly on Monday after Tokyo and Washington confirmed their first joint currency intervention since 2011 to support the ailing currency, which had been near 40-year lows. The yen jumped as much as 1.4% in the Asian morning to 155.20 per US dollar. Japan reportedly sold almost $60 billion, and the U.S. Treasury plans to spend between $5 billion and $10 billion, activating a Fed repo facility using Japan's bond holdings as collateral. The Bank of Japan had kept its policy rate steady on Friday but warned for the first time that underlying inflation could exceed its target, with future policy discussions focusing on upside price risks. The yield on Japan's 2-year government bond rose to 1.545%, a three-decade high.