Rare Japan-South Korea joint intervention lifts Yen and Won — Reuters
Oleh Lallalit Srijandorn
Diperbarui: 31 Jul 2026
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Japanese and South Korean officials stepped in to buy their currencies in the open market in what sources described as a rare and an unprecedented coordinated market intervention, possibly alongside the United States (US), Reuters reported on Friday.
Japanese and South Korean officials stepped in to buy their currencies in the open market in what sources described as a rare and an unprecedented coordinated market intervention, possibly alongside the United States (US), Reuters reported on Friday.
The intervention late Thursday boosted the Japanese Yen (JPY) away from the 40-year lows, although traders were back testing Tokyo's resolve on Friday as the Bank of Japan (BoJ) left the interest rate unchanged, as widely expected.
The move in the JPY came around the same time as the Korean Won strengthened 2% to its highest in nine months. A market source told Reuters that South Korea's foreign exchange authorities had conducted a rare dollar-selling intervention.
Earlier Friday, the Nikkei newspaper reported that Japan likely conducted a massive JPY-buying intervention and said that US authorities conducted rate checks.
Market reaction
At the press time, the USD/JPY pair is up 0.74% on the day to trade at 160.72.
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
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