U.S. and Japanese officials warned investors they’re determined to keep defending the yen after jolting currency markets with their first joint intervention in 15 years.

It’s still unclear how much Washington spent to help lift the yen from its four-decade low. But the currency’s rebound points at interventions larger than in 1998 and 2011, when U.S. contributions didn’t surpass the $1 billion mark. Japan alone is estimated to have spent $53 billion on Thursday — a likely single-day record.

Treasury Secretary Scott Bessent publicly vowed on X that the U.S. “will not hesitate” to wade back into the market, if needed. On Monday morning, Japanese Finance Minister Satsuki Katayama confirmed their joint campaign — sending a clear signal Tokyo had a powerful partner in its bid to strengthen the currency. South Korean officials also appeared to be part of the coordination.

The yen gained as much as 1.4% versus the dollar during morning trading in Tokyo, as that message was digested.

“This is a historic development. It’s not something the market should underestimate,” said Yuji Saito, executive adviser at SBI FXTrade. “It has the potential to become a real turning point in U.S.-Japan currency cooperation.”

Speculation is emerging of further joint moves. Expectations are rising for the Federal Reserve and Bank of Japan to raise interest rates in September, after the central bank in Tokyo held its benchmark rate on Friday but flagged inflation risks. Doubts over Prime Minister Sanae Takaichi’s big spending plans also raise the likelihood of renewed yen weakening, furthering the case for joint action.

President Donald Trump on Sunday cast Washington’s assistance as a simple gesture “of friendship.” “They wanted a little bit of help, and we’re always there for Japan,” Trump told reporters aboard Air Force One, citing the “good relationship” between the two countries.

In reality, Washington has its own incentives. As the largest foreign holder of Treasuries, any Japanese sales to fund intervention risk pressuring U.S. bonds at a time when inflation concerns and the Iran war are pushing up yields. A stronger yen would also ease concerns that Japanese exporters are unduly benefiting from a weak currency, one of Trump’s long-standing complaints.

The last time the U.S. and Japan intervened for the yen was back in 2011, when Group of Seven nations helped weaken the overly strong currency. That rare cross-continent coordination, like the current push, didn’t match the magnitude of the 1985 Plaza Accord, which saw several developed countries agree to weaken the dollar through intervention. That fundamentally reshaped exchange-rate expectations and ushered in years of yen appreciation.

As Japan’s currency briefly touched 155.23 against the dollar on Monday morning, it wasn’t immediately clear if officials had made another entry into the market — or if that move was the response of edgy investors and algorithmic trading.

Katayama declined to confirm another round of intervention, while Japan’s top currency diplomat Atsushi Mimura made clear both sides intended to remain vigilant.

“Since the U.S.-Japan joint statement last September — and really even before that — I have been in close communication with the U.S. Treasury on a range of issues,” Mimura told reporters. “The real work starts now, and we intend to stay on top of it.”

Officials are also expanding their toolkit. Katayama flagged Japan would utilize a Fed facility going forward that provides central banks with dollars using Treasury holdings as collateral. That tool was established during the frantic market moves of 2020, as the impact of the Covid pandemic rippled across the globe.

The facility enables Japan to access up to $60 billion per day without selling Treasuries, limiting any impact on U.S. yields and expanding the potential scope for intervention.

“It’s an attempt to maximize the signaling effect and get the biggest bang for the buck with the tools already available,” said Masahiko Loo, senior fixed-income strategist at State Street Investment Management.

For context, Japan likely spent around $34 billion intervening in the currency market on Friday, according to a Bloomberg analysis of central bank accounts.

Japanese authorities finally broke their silence on U.S. coordination after a photo emerged of Bessent’s notepad at a cabinet meeting with a single item on his to-do list: Buy yen. That left little doubt in the market and signaled Washington might even be keen to go public.

The U.S. Treasury chief’s meeting with Katayama in Tokyo in May — and a subsequent phone call — had already fueled months of speculation over concerted action and conditions to move forward.

Bessent, who has deep knowledge of Japan forged in a decades-long hedge fund career, is taking an unusually assertive approach to shaping the economic trajectory of America’s top Asian ally. He has repeatedly flagged the need for the BOJ not to fall behind the curve on tackling deflation, and the importance of allowing the central bank to normalize policy.

A move to nudge the BOJ to raise rates in September at the same time as the Fed’s likely move still seems a stretch given the perception that Takaichi’s government is trying to slow down the central bank, not speed it up.

But market players are ramping up their bets that the BOJ will move earlier, with overnight swaps now pointing to a 46% chance of a move in September, up from around 30% a week ago.

Much will depend on how the currency performs over the coming weeks, said Harumi Taguchi, principal economist at S&P Global Market Intelligence.

“If the intervention proves effective, I believe the BOJ will likely hold off on a rate hike in September,” she said.

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—With assistance from John Cheng, Atsuko Fukase and Cormac Mullen.

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