Japan's Ministry of Finance officially confirmed on Monday that it had jointly intervened in the foreign exchange market with the U.S. Treasury, pushing the Japanese Yen to rebound sharply by nearly 5% in a single week, from last week's 40-year low of 164 Yen to the US Dollar, to 156.8 Yen. The estimated scale of this intervention exceeded 50 billion US dollars. U.S. Treasury Secretary Scott Bessent confirmed U.S. participation, and there were reports that the New York Fed sold Euros to buy Japanese Yen. Affected by this, the DXY fell below 100 for the first time since June this year.

However, the market reaction was not as enthusiastic as expected, with the Yen's year-to-date gain against the US Dollar being almost zero. Several foreign exchange strategists and economists pointed out that as long as the interest rate differential between the U.S. and Japan (Japan's policy rate at 1%, the Federal Reserve's federal funds target rate at 3.50%-3.75%) remains unchanged, any intervention is merely a temporary solution. Last Friday, the Bank of Japan (BOJ) chose to stand pat, keeping interest rates unchanged, further exacerbating market doubts about the long-term effectiveness of the intervention. Analysts generally believe that unless the Federal Reserve cuts interest rates or the Bank of Japan (BOJ) starts raising interest rates, it will be difficult for the Yen to achieve meaningful appreciation.