Yen rebounds after joint US-Japan currency intervention

What happened

• The yen had fallen to almost 164 per dollar, its weakest since 1986, and stood near 156 on Monday afternoon in Asia.
• Japan's solo intervention in May had produced no lasting effect; the yen gained more than 1 percent against the dollar on Monday.
• The Financial Times reported the US Treasury sold euros to buy yen; Nikkei Asia estimates Friday's operation at $32bn.
• The Bank of Japan's policy rate has been 1 percent since June, against US rates of 3.5 to 3.75 percent.

The view from outside

FAZ (Germany) reads the US move as self-interest: Washington fears Tokyo could sell part of its US Treasury holdings, the largest foreign stock, to finance yen purchases. It also points to Japanese public debt above 200 percent of GDP, which the intervention leaves untouched.

What could happen next

• Both governments say they will not hesitate to intervene again; no target rate, amount or time frame has been named.
• Tokyo plans to draw dollars from the Fed's pandemic-era FIMA repo facility, which Bloomberg reports Evercore sees as a test of resolve.
• The interest rate gap and Middle East energy import costs, both named as causes of the slide, remain unchanged.