{"id":1437,"date":"2026-08-13T05:40:55","date_gmt":"2026-08-13T05:40:55","guid":{"rendered":"https:\/\/nationallogisticspost.com\/?p=1437"},"modified":"2026-08-13T05:40:55","modified_gmt":"2026-08-13T05:40:55","slug":"why-the-trump-administration-intervened-to-support-japans-yen","status":"publish","type":"post","link":"https:\/\/nationallogisticspost.com\/?p=1437","title":{"rendered":"Why the Trump Administration Intervened to Support Japan’s Yen"},"content":{"rendered":"
\n
\n

T<\/span>he Japanese yen has been unusually weak, and both Tokyo and Washington have become concerned that its decline could become disorderly. A weaker yen makes Japanese goods cheaper for foreign buyers, but it also raises the cost of imports for Japanese consumers and can create problems in financial markets if the decline becomes too rapid. Governments sometimes respond by intervening in currency markets: buying a currency they believe has fallen too far, selling one they believe has risen too far, or both.<\/p>\n

Read more Simon & Schuster Should Explain Its Decision to Republish Susan Abulhawa<\/a><\/p>\n

That is what makes the recent U.S. action noteworthy. Washington joined Tokyo in supporting the yen, something the United States had not done in decades. More intriguingly, the Treasury did not use the conventional mechanism of selling dollars and buying yen. It reportedly sold euros to purchase yen. A photographed note belonging to Treasury Secretary Scott Bessent indicated a contemplated U.S. purchase of roughly $5 billion to $10 billion worth of yen.<\/p>\n

\n
\n

In the end, the intervention makes the most sense as one more part of a broader effort to manage the terms on which American producers compete with the rest of the world.<\/p>\n<\/blockquote>\n<\/div>\n

Why would Washington care about the value of Japan\u2019s currency? There are at least three possible explanations. The first is Treasury-market protection: preventing Japanese sales of U.S. government bonds. The second is yen stabilization: stopping a disorderly currency decline before it becomes financially disruptive. The third is trade competitiveness: preventing a weak yen from giving Japanese exporters a price advantage that offsets U.S. tariffs. All three are plausible. But the third may fit most closely with the administration\u2019s broader economic agenda.<\/p>\n

The most prominent explanation for Washington\u2019s involvement centers on the Treasury market. Japan is one of the world\u2019s largest holders of U.S. government securities. If continued yen weakness forces Tokyo to intervene repeatedly, Japan may need to liquidate foreign reserve assets, including treasuries, to finance yen purchases. Large and sustained sales could put upward pressure on U.S. yields at an especially inconvenient moment, given enormous federal financing requirements.<\/p>\n

The argument is plausible, but there are reasons to doubt that it provides the principal explanation. First, Japanese currency intervention does not mechanically require immediate, one-for-one sales of long-duration treasuries. Japan maintains an enormous and diversified reserve portfolio, and reserve managers have considerable flexibility concerning which assets are sold, allowed to mature, repoed, or otherwise mobilized. Japanese intervention could certainly produce Treasury selling at the margin. But that is different from demonstrating that the likely sales would be sufficiently large or disorderly to threaten the deepest sovereign-debt market in the world.<\/p>\n

There is another complication. Long-dated Japanese government bond yields have already risen to multi-decade or, for some maturities, record highs. As JGB yields become more attractive, Japanese institutions have an increasingly powerful incentive to repatriate capital from U.S. securities irrespective of currency intervention. Treasury selling, in other words, need not be caused principally by yen defense; it can emerge naturally as relative yields and hedging economics change.<\/p>\n

The second objection is one of scale. Bessent\u2019s photographed note reportedly contemplated $5 billion to $10 billion in yen purchases. That is enough to surprise currency traders, punish leveraged positions, and communicate official resolve. But it is a drop in the bucket compared with the capital flows determining the equilibrium exchange rate between two of the world\u2019s major currencies.<\/p>\n

If interest-rate differentials, carry trades, portfolio allocations, and monetary-policy expectations continue encouraging private investors to sell yen, establishing a materially different equilibrium could require tens or even hundreds of billions of dollars deployed over weeks or months. Intervention can alter expectations and positioning. A $5 billion or $10 billion transaction cannot indefinitely overpower underlying monetary and capital-market fundamentals.<\/p>\n

The obvious alternative would be for the Bank of Japan simply to raise interest rates more aggressively, narrowing the U.S.\u2013Japan yield differential and attacking a fundamental source of yen weakness rather than its symptoms. But doing so risks weakening an already fragile domestic economy, disrupting a financial system accustomed to decades of extraordinarily cheap money, and \u2014 critically \u2014 eliminating some of the export advantage Japan derives from a weak currency. Intervention therefore offers Tokyo a compromise: prevent a disorderly yen collapse without tightening monetary policy enough to sacrifice the competitive benefits of a moderately weak yen.<\/p>\n

There is, however, another explanation for Washington\u2019s concern that fits much more comfortably with the Trump administration\u2019s broader economic program: an extraordinarily weak yen is immensely supportive of Japanese exports.<\/p>\n

Read more California After George Floyd: What Happened to Black Homicide?<\/a><\/p>\n

Consider a Japanese manufacturer producing an automobile for \u00a54 million. At \u00a5120 to the dollar, that represents approximately $33,300. At \u00a5160, it is only $25,000. The exporter can lower its dollar price and gain American market share, maintain its dollar price and capture substantially larger yen-denominated margins, or divide the exchange-rate windfall between price reductions and profits. The same mechanism operates across machinery, electronics, automobiles, components, and other Japanese tradable goods.<\/p>\n

That matters because a tariff and an exchange rate ultimately operate on the same economic variable: relative prices. The Trump administration has imposed tariffs precisely to raise the relative price of imported goods and improve the competitive position of American production. But if Washington imposes a tariff on Japanese goods while the yen subsequently depreciates 15 or 20 percent, the exchange rate movement can offset a substantial portion of the price wedge the tariff was intended to create. The precise magnitude depends upon exchange-rate pass-through, invoicing, margins, and pricing-to-market behavior, but the direction is unmistakable.<\/p>\n

This interpretation also makes the choice of euros particularly interesting. Washington bought yen without selling dollars. In doing so, it arguably circumvented the strictest definition of foreign exchange intervention: the official purchase or sale of one\u2019s own currency for the purpose of influencing its exchange value. The Treasury could therefore exert upward pressure on the yen without explicitly entering the market as a seller of dollars.<\/p>\n

That distinction has political as well as technical significance. Washington has little reason to provide rhetorical ammunition to governments advocating dedollarization. China, Russia, Iran, the BRICS countries, and others have spent years arguing that excessive dependence on the dollar creates vulnerabilities and that international trade and reserves should migrate toward alternative currencies. An overt U.S. sale of dollars to manipulate an exchange rate would inevitably be presented as evidence that even Washington is prepared to reduce dollar exposure when convenient. Selling euros gives that argument no quarter: the United States supported the yen without making the dollar the instrument being sold.<\/p>\n

It also avoids sending a broader signal that Washington wants generalized dollar depreciation. Selling dollars for yen would simultaneously strengthen the Japanese currency and weaken the American one. Selling euros allows policymakers to attack yen weakness more selectively while leaving the dollar outside the transaction.<\/p>\n

Avoiding disorderly Japanese reserve liquidation is certainly a reasonable objective. But the size of the operation makes that explanation less persuasive as the dominant motivation. Five or 10 billion dollars is a remarkably small insurance policy against disruption in a Treasury market measured in tens of trillions of dollars.<\/p>\n

As a signal, however, $5 billion or $10 billion can be powerful. For currency speculators, the message may be even simpler: the area around \u00a5160 to the dollar is no longer merely another price level, but a potentially dangerous zone in which Washington and Tokyo have demonstrated a willingness to appear on the other side of the trade. And that signal is entirely consistent with the administration\u2019s trade policy: Washington will not spend enormous political capital constructing tariff barriers only to watch exchange-rate movements quietly dismantle them.<\/p>\n

Tariffs and exchange rates are usually discussed separately. Economically, they cannot be. Both alter relative prices, both affect international competitiveness, and one can substantially offset the other. The current administration has spent much of its second term attempting to reshape those relative prices in favor of American production and at the cost of affordability. Viewed from that perspective, supporting the yen was not an anomalous excursion into currency management. It was an extension of the trade war by other means.<\/p>\n

In the end, the intervention makes the most sense as one more part of a broader effort to manage the terms on which American producers compete with the rest of the world, substituting government intervention for the price signals markets would otherwise provide.<\/p>\n

Read more CIA Files Raise New Questions About Smartmatic and Venezuela\u2019s Elections<\/a><\/p>\n

READ MORE from Peter C. Earle:<\/strong><\/p>\n

Is the US Already in a Recession?<\/strong><\/p>\n

Remembering Alan Greenspan<\/strong><\/p>\n

Good News, Bad Reactions: The Logic of Financial Markets<\/strong><\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

A most wonderful article<\/p>\n","protected":false},"author":1,"featured_media":1436,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[],"class_list":["post-1437","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-free-the-market"],"yoast_head":"\nWhy the Trump Administration Intervened to Support Japan’s Yen - National Logistics Post<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/nationallogisticspost.com\/?p=1437\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Why the Trump Administration Intervened to Support Japan’s Yen - National Logistics Post\" \/>\n<meta property=\"og:description\" content=\"A most wonderful article\" \/>\n<meta property=\"og:url\" content=\"https:\/\/nationallogisticspost.com\/?p=1437\" \/>\n<meta property=\"og:site_name\" content=\"National Logistics Post\" \/>\n<meta property=\"article:published_time\" content=\"2026-08-13T05:40:55+00:00\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"7 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/nationallogisticspost.com\\\/?p=1437#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/nationallogisticspost.com\\\/?p=1437\"},\"author\":{\"name\":\"admin\",\"@id\":\"https:\\\/\\\/nationallogisticspost.com\\\/#\\\/schema\\\/person\\\/af6e6ad9b3cf5bfe495dc5541ee6a5cc\"},\"headline\":\"Why the Trump Administration Intervened to Support Japan’s Yen\",\"datePublished\":\"2026-08-13T05:40:55+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/nationallogisticspost.com\\\/?p=1437\"},\"wordCount\":1447,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/nationallogisticspost.com\\\/?p=1437#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/nationallogisticspost.com\\\/wp-content\\\/uploads\\\/2026\\\/08\\\/145efd30abb50479f100a6606f5dfb90.png\",\"articleSection\":[\"Free the Market\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/nationallogisticspost.com\\\/?p=1437#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/nationallogisticspost.com\\\/?p=1437\",\"url\":\"https:\\\/\\\/nationallogisticspost.com\\\/?p=1437\",\"name\":\"Why the Trump Administration Intervened to Support Japan’s Yen - National Logistics Post\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/nationallogisticspost.com\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/nationallogisticspost.com\\\/?p=1437#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/nationallogisticspost.com\\\/?p=1437#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/nationallogisticspost.com\\\/wp-content\\\/uploads\\\/2026\\\/08\\\/145efd30abb50479f100a6606f5dfb90.png\",\"datePublished\":\"2026-08-13T05:40:55+00:00\",\"author\":{\"@id\":\"https:\\\/\\\/nationallogisticspost.com\\\/#\\\/schema\\\/person\\\/af6e6ad9b3cf5bfe495dc5541ee6a5cc\"},\"breadcrumb\":{\"@id\":\"https:\\\/\\\/nationallogisticspost.com\\\/?p=1437#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/nationallogisticspost.com\\\/?p=1437\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/nationallogisticspost.com\\\/?p=1437#primaryimage\",\"url\":\"https:\\\/\\\/nationallogisticspost.com\\\/wp-content\\\/uploads\\\/2026\\\/08\\\/145efd30abb50479f100a6606f5dfb90.png\",\"contentUrl\":\"https:\\\/\\\/nationallogisticspost.com\\\/wp-content\\\/uploads\\\/2026\\\/08\\\/145efd30abb50479f100a6606f5dfb90.png\",\"width\":1536,\"height\":753},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/nationallogisticspost.com\\\/?p=1437#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/nationallogisticspost.com\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Why the Trump Administration Intervened to Support Japan’s Yen\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/nationallogisticspost.com\\\/#website\",\"url\":\"https:\\\/\\\/nationallogisticspost.com\\\/\",\"name\":\"National Logistics Post\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/nationallogisticspost.com\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/nationallogisticspost.com\\\/#\\\/schema\\\/person\\\/af6e6ad9b3cf5bfe495dc5541ee6a5cc\",\"name\":\"admin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/50b1ad2e498f523425ee0a8cc5180a210646db1622662a3d56cc405d3e0c346a?s=96&d=mm&r=g\",\"url\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/50b1ad2e498f523425ee0a8cc5180a210646db1622662a3d56cc405d3e0c346a?s=96&d=mm&r=g\",\"contentUrl\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/50b1ad2e498f523425ee0a8cc5180a210646db1622662a3d56cc405d3e0c346a?s=96&d=mm&r=g\",\"caption\":\"admin\"},\"sameAs\":[\"http:\\\/\\\/nationallogisticspost.com\"],\"url\":\"https:\\\/\\\/nationallogisticspost.com\\\/?author=1\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Why the Trump Administration Intervened to Support Japan’s Yen - National Logistics Post","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/nationallogisticspost.com\/?p=1437","og_locale":"en_US","og_type":"article","og_title":"Why the Trump Administration Intervened to Support Japan’s Yen - National Logistics Post","og_description":"A most wonderful article","og_url":"https:\/\/nationallogisticspost.com\/?p=1437","og_site_name":"National Logistics Post","article_published_time":"2026-08-13T05:40:55+00:00","author":"admin","twitter_card":"summary_large_image","twitter_misc":{"Written by":"admin","Est. reading time":"7 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/nationallogisticspost.com\/?p=1437#article","isPartOf":{"@id":"https:\/\/nationallogisticspost.com\/?p=1437"},"author":{"name":"admin","@id":"https:\/\/nationallogisticspost.com\/#\/schema\/person\/af6e6ad9b3cf5bfe495dc5541ee6a5cc"},"headline":"Why the Trump Administration Intervened to Support Japan’s Yen","datePublished":"2026-08-13T05:40:55+00:00","mainEntityOfPage":{"@id":"https:\/\/nationallogisticspost.com\/?p=1437"},"wordCount":1447,"commentCount":0,"image":{"@id":"https:\/\/nationallogisticspost.com\/?p=1437#primaryimage"},"thumbnailUrl":"https:\/\/nationallogisticspost.com\/wp-content\/uploads\/2026\/08\/145efd30abb50479f100a6606f5dfb90.png","articleSection":["Free the Market"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/nationallogisticspost.com\/?p=1437#respond"]}]},{"@type":"WebPage","@id":"https:\/\/nationallogisticspost.com\/?p=1437","url":"https:\/\/nationallogisticspost.com\/?p=1437","name":"Why the Trump Administration Intervened to Support Japan’s Yen - National Logistics Post","isPartOf":{"@id":"https:\/\/nationallogisticspost.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/nationallogisticspost.com\/?p=1437#primaryimage"},"image":{"@id":"https:\/\/nationallogisticspost.com\/?p=1437#primaryimage"},"thumbnailUrl":"https:\/\/nationallogisticspost.com\/wp-content\/uploads\/2026\/08\/145efd30abb50479f100a6606f5dfb90.png","datePublished":"2026-08-13T05:40:55+00:00","author":{"@id":"https:\/\/nationallogisticspost.com\/#\/schema\/person\/af6e6ad9b3cf5bfe495dc5541ee6a5cc"},"breadcrumb":{"@id":"https:\/\/nationallogisticspost.com\/?p=1437#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/nationallogisticspost.com\/?p=1437"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/nationallogisticspost.com\/?p=1437#primaryimage","url":"https:\/\/nationallogisticspost.com\/wp-content\/uploads\/2026\/08\/145efd30abb50479f100a6606f5dfb90.png","contentUrl":"https:\/\/nationallogisticspost.com\/wp-content\/uploads\/2026\/08\/145efd30abb50479f100a6606f5dfb90.png","width":1536,"height":753},{"@type":"BreadcrumbList","@id":"https:\/\/nationallogisticspost.com\/?p=1437#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/nationallogisticspost.com\/"},{"@type":"ListItem","position":2,"name":"Why the Trump Administration Intervened to Support Japan’s Yen"}]},{"@type":"WebSite","@id":"https:\/\/nationallogisticspost.com\/#website","url":"https:\/\/nationallogisticspost.com\/","name":"National Logistics Post","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/nationallogisticspost.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/nationallogisticspost.com\/#\/schema\/person\/af6e6ad9b3cf5bfe495dc5541ee6a5cc","name":"admin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/50b1ad2e498f523425ee0a8cc5180a210646db1622662a3d56cc405d3e0c346a?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/50b1ad2e498f523425ee0a8cc5180a210646db1622662a3d56cc405d3e0c346a?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/50b1ad2e498f523425ee0a8cc5180a210646db1622662a3d56cc405d3e0c346a?s=96&d=mm&r=g","caption":"admin"},"sameAs":["http:\/\/nationallogisticspost.com"],"url":"https:\/\/nationallogisticspost.com\/?author=1"}]}},"_links":{"self":[{"href":"https:\/\/nationallogisticspost.com\/index.php?rest_route=\/wp\/v2\/posts\/1437","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/nationallogisticspost.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nationallogisticspost.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nationallogisticspost.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/nationallogisticspost.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1437"}],"version-history":[{"count":0,"href":"https:\/\/nationallogisticspost.com\/index.php?rest_route=\/wp\/v2\/posts\/1437\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/nationallogisticspost.com\/index.php?rest_route=\/wp\/v2\/media\/1436"}],"wp:attachment":[{"href":"https:\/\/nationallogisticspost.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1437"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nationallogisticspost.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1437"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nationallogisticspost.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1437"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}