President Donald Trump on Sunday confirmed that the United States had intervened to support the Japanese yen, calling the move a “signal of friendship” that would financially benefit the US and world economy.
The Financial Times reported on Friday that the US Treasury had jointly intervened with Japan to prop up the yen for the first time in nearly three decades.
Asked aboard Air Force One why the US was moving to support Japan’s currency, Trump said: “Because we have a good relationship with Japan.”
The US will see “financial benefit” from the move and “it’s also good for the world economy,” Trump insisted, but “it was really more than anything else, it was a signal of friendship.”
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“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. And we’re always there for Japan. Japan’s been very good to us, with the exception, of course, of Pearl Harbor,” the president said.
In its statement, Japan’s finance ministry said Friday’s yen-buying intervention with the US Treasury Department “countered excessive volatility and disorderly movements in the Japanese yen in recent months”.
“The Japanese Ministry of Finance remains attentive and in close communication with our counterparts at the US Treasury,” it added. “We will not hesitate to conduct further joint intervention.”
The Financial Times reported, citing people familiar with the matter, that the Federal Reserve Bank of New York had taken the unusual step of selling euros to buy yen on behalf of the US Treasury on Friday.
The intervention came after the yen slid to 163.24 per dollar last month, its weakest level since 1986, as higher US interest rates, rising oil prices and persistent capital outflows weighed on the currency.
Washington’s move came as the yen rebounded sharply last week, fuelling speculation that Japanese authorities had also intervened in currency markets.
Analysts cited by FT estimated Japan’s intervention may have totalled about 8.45 trillion yen ($52.8 billion).
The Nikkei business daily put the amount at between 6 trillion and 7 trillion yen.
According to FT, the move would be the first coordinated US-Japan effort to support the yen since 1998.
(FRANCE 24 with AFP)
