Following a historic effort to prop up the yen and prevent economic spillover, Japanese and American leaders vowed to intervene further if needed.
Japan’s top currency diplomat called the joint action the “culmination” of the US-Japan alliance, while President Donald Trump said it was a “signal of friendship.”
The action was designed to send a message — as evidenced by the US Treasury secretary’s visible to-do list — but critics said the trade’s structure comes with financial risk: Selling euros to buy yen “undercuts the efficacy of US participation, because it invariably will have markets wondering why the US didn’t just fund yen buying out of dollars,” one Brookings Institution analyst wrote. “Markets will see this as a sign of weakness.”