U.S. Treasury Secretary Bessent publicly stated on Thursday that the yen “appears to be significantly undervalued in my view” and acknowledged that Japan may have intervened in the foreign exchange market to prop up the yen. This is the clearest public statement to date from the U.S. regarding Japan’s currency intervention and marks a significant increase in coordination between the U.S. and Japan on exchange rate issues.

Meanwhile, market reports indicate that Japanese authorities carried out a large-scale intervention on Thursday during the New York trading session, buying yen and selling dollars. This caused the dollar to plummet nearly 500 pips against the yen within an hour, briefly falling below the 158 mark, with an intraday decline of 3.3%.This intervention took place on the eve of the Bank of Japan (BOJ) policy meeting. Analysts believe the timing was highly strategic, capitalizing on the tailwind of a weaker dollar following the Federal Reserve’s decision to keep interest rates unchanged.