The US has stepped in to buy Japanese yen. Here's why. The rare bilateral move aims to reverse the yen's 40-year low against the dollar, worsened by rising energy costs from the Iran war. The U.S. and Japan jointly intervened in currency markets Friday, with the U.S. buying yen for the first time in over a decade. (Scripps News) By: John Liu, Logan Schiciano Posted 10:46 AM, Aug 03, 2026 and last updated 6:45 AM, Aug 04, 2026 The United States bought the Japanese yen for the first time in more than a decade as "a signal of friendship," President Donald Trump said Sunday. The rare bilateral intervention in Japan's currency market was designed to prop up the yen from its 40-year low against the dollar. "They have a weakening yen, and they wanted a little bit of help. And we're always there for Japan," Trump told reporters aboard Air Force One. Trump's comment confirmed the Friday joint action by the US and Japan to reverse the continuing weakening of the yen, whose depreciation has been exacerbated this year by increasing energy costs due to the Iran war. The US has interests in shoring up the yen because a stronger dollar makes American exports pricier for foreign consumers. Similarly, while a weak yen benefits Japanese exporters - and foreign tourists who go to Japan - it also increases the cost of imports like oil and gas, fueling inflation. Japan's Finance Minister Satsuki Katayama said in a Monday statement that the Friday action "countered excessive volatility and disorderly movements in the Japanese yen in recent months." The Financial Times first reported Friday that the Federal Reserve Bank of New York sold euros for yen on behalf of the Treasury Department, citing people familiar with the matter. Trump said Sunday that supporting the yen would be "good for the world economy," and that the US would benefit financially from the move without explaining how. Treasury Secretary Scott Bessent also noted the intervention on X on Sunday, saying the Treasury Department "will not hesitate to participate in further joint intervention." "We strongly support Japan's decisive market and monetary steps to correct the substantial undervaluation of the yen," he said. A Reuters photograph from President Trump's cabinet meeting at Camp David on Friday showed Bessent had written on his notepad a "to-do" list of the incoming US purchase. Taken over Bessent's shoulder during an on-the-record portion of the meeting, the Camp David notepad bore the underscored words "To Do" followed by "Buy Japanese Yen (JPY) $5-10 bil." How did the yen get here? Despite being one of the world's top economies, Japan has long struggled with a weak yen. Owing to a recession and chronic deflation in the 1990s, Japan had kept its interest rates as low as zero or negative in the hope of rejuvenating the economy since then through the 2010s. Even though Japan raised its interest rates in 2024, the yen has continued to decline as they remain lower compared to the rest of the world, as Western central banks aggresively hiked rates to fight inflation. "Japan's persistently low interest rates relative to those abroad, especially in the US, have encouraged international investors to borrow - or short - the yen and invest the proceeds in higher-yielding currencies," said Hung Tran, a nonresident senior fellow at US think tank Atlantic Council and a former deputy director at the International Monetary Fund, in a report last month. Additionally, substantial outward investment by Japanese companies, as well as foreign earnings of these firms remaining overseas, continued to weigh on the yen, Tran added. For a country dependent on energy and food imports like Japan, the Iran war this year also posed outsized impacts, as it fights rising cost of living. "Rising oil and gas prices worsen the trade balance and generate inflationary pressures," said Sayuri Shirai, an economics professor at Keio University in Tokyo and a former board member of the Bank of Japan. Such inflation suppresses purchasing power and limits economic momentum, providing limited support for a yen rebound, she explained in an analysis on the Australian National University's East Asia Forum. Could it reverse yen's depreciation? The Bank of Japan, the country's central bank, had intervened in the markets to boost the yen in late April. While the earlier move briefly propped up the currency, it proved to be a temporary success. Analysts are less optimistic that the latest intervention could fundamentally alter the broader course of the yen's weakening. Shusuke Yamada, chief foreign exchange and interest rate strategist of Japan at Bank of America Securities, said the conventional view is that foreign exchange intervention could "only buy time" in a Friday report. For now, the yen has appreciated by a similar scale on the first day of intervention as it did during the previous episode. But the impact of the latest move is expected to be greater, given the historic joint nature of the intervention, British bank Barclays said in a Monday research note. "Even if the JPY were to strengthen further in the near term, we continue to believe that longer-term downward pressures remain in place," it said, referring to the currency.

As Milei grinds toward reelection, IMF chief backs Argentina's economic progress. CN 31 Jul 2026, 15:33 GMT+ BUENOS AIRES (CN) - President Javier Milei received a vote of growing confidence in Argentina's economic turnaround under his controversial programs as IMF Managing Director Kristalina Georgieva struck an upbeat tone during her first official visit to the country this week. "Argentina is in a much stronger position, and this is the result of the government's hard work and the perseverance and sacrifice of the Argentine people," the International Monetary Fund chief said at a news conference with Economy Minister Luis Caputo Monday. The optimism comes at a pivotal moment for Argentina's libertarian government, one year before the next presidential election. Milei, a right-wing libertarian with close ties to President Donald Trump, took office in 2023 pledging to slash public spending, privatize the economy and tame the long-standing inflation crisis. His promises - and, to some extent, his ability to deliver - captured the attention of global markets and mainstream economists, who viewed his economic program as radical but potentially promising. But critics argue his policies have come at a high cost and his reelection isn't guaranteed. Since Milei took office, formal employment has fallen by more than 100,000 registered private-sector jobs. Household debt has increased as Argentines rely more on credit to cope with declining incomes. Public subsidies for energy and transportation have been reduced, and electricity and natural gas rates have risen by several hundred percent in many cases. Estimates from the Observatorio de la Deuda Social Argentina at the Universidad Catolica Argentina and other research groups indicate purchasing power fell sharply during the first months of Milei's administration, with real wages losing about 15% to 20% of their value between late 2023 and early 2024 before beginning to recover. Speaking with Caputo at a news conference in Buenos Aires, Georgieva acknowledged the challenges Argentines face but said she did not "foresee the need for Argentina to go to the fund for additional financing." She said the country was on a "good track" to join the group of nations that "borrowed from the fund, reformed their economies, and borrowed no more," before turning to the audience with a challenge: "Are you guys ready for it?... It's not going to be me; it's you. Can you persevere to do it?" Georgieva's visit drew protests from labor unions. Members of state workers union ATE placed signs outside the Economy Ministry denouncing what they described as "eight years of austerity" tied to IMF-backed policies. The signs blamed the fund for spending cuts under former presidents Mauricio Macri and Alberto Fernandez, as well as Milei. They said public-sector wages lost about half of their purchasing power since Argentina signed its first IMF agreement in 2018. Argentina remains the IMF's largest borrower, with about $57.7 billion in outstanding credit, much of it stemming from the 2018 program. That agreement was later refinanced before Milei negotiated a new $20 billion arrangement last year. The two-day visit, ahead of a key IMF review in September, included meetings with Milei, Caputo, Central Bank Governor Santiago Bausili and other senior officials, as well as academics, students and business leaders. Georgieva also traveled to Vaca Muerta, Argentina's vast shale formation, underscoring the government's hopes that expanding energy exports will help cement the economic recovery. The visit marked the first by an IMF managing director to Buenos Aires since Christine Lagarde's 2018 trip, shortly after the fund approved the record bailout. Hector Torres, a former executive director at the International Monetary Fund, said Georgieva's visit was best understood as a political gesture rather than a technical mission. IMF managing directors do not typically travel for technical discussions, he said, leaving those responsibilities to staff. He described Argentina's relationship with the IMF as "very good," arguing the government has pursued a fiscal adjustment even more ambitious than the fund expected, with strong backing from the U.S. Treasury. Torres said Georgieva's visit to Vaca Muerta carried "high symbolism," directing the attention of investors and the media toward what he called Argentina's new "foreign exchange-generating engine." He also rejected the idea that Milei's fiscal austerity was driven by pressure from the IMF or financial markets. Instead, he said, it reflects Milei's own convictions: "He promised it during his campaign, and he's implementing it as president." Torres said the future of the relationship would depend largely on who wins Argentina's 2027 presidential election and whether the next administration chooses to continue Milei's economic agenda. Argentina's relationship with the International Monetary Fund has long been among the institution's most contentious. The IMF became a central target of public anger during the country's devastating 2001 economic collapse, with many Argentines blaming the fund for policies that ended in default, recession and social unrest. In 2006, then-President Nestor Kirchner sought to sever that relationship by paying off Argentina's outstanding IMF debt in full, arguing the move would restore economic sovereignty. More than a decade later, Argentina returned to the Fund under Macri, whose government secured a record $57 billion rescue package in 2018 as investors fled Argentine assets and the peso plunged. The IMF has remained a dominant force in Argentine economic policy ever since, though the relationship has evolved sharply under Milei. His government has embraced an aggressive fiscal adjustment that IMF officials have repeatedly praised, making the current relationship one of the closest in decades. On the political left, however, the fund remains deeply divisive. Opposition lawmakers and activists have repeatedly argued the Macri-era borrowing was illegal and have sought to repudiate or invalidate the debt, contending it violated Argentine law and IMF rules. Those efforts have gained little traction, and successive governments - including the current one - have continued negotiating with the fund rather than attempting to walk away from their obligations. Lucia Cholakian Herrera is a Courthouse News correspondent covering Latin America. She is based in Buenos Aires, Argentina.

New U.S. tariffs mark broader shift in Trump's trade strategy. Anabelle Colaco 28 Jul 2026, 13:04 GMT+ WASHINGTON D.C.: U.S. President Donald Trump's latest tariff measures signal a shift toward a more durable trade strategy, with his administration relying on long-established trade laws to rebuild tariffs that officials and analysts say are likely to withstand legal challenges and expand in the months ahead. After the U.S. Supreme Court struck down an early push to impose sweeping tariffs under emergency powers, Trump's team is now using more established trade laws to pursue many of the same objectives. The latest round of duties - tariffs of 10 percent or 12.5 percent on imports from 60 countries over alleged failures to enforce forced-labor bans - is expected to be followed by additional trade actions targeting excess industrial capacity, alleged intellectual property theft by Vietnam, and protections for strategic industries including semiconductors, robotics and industrial machinery. "We're at the end of the beginning of the Trump tariff agenda," said Dan Ujczo, associate general counsel at Canadian oil producer Cenovus Energy, who specializes in U.S.-Canada trade. "Within the next few weeks, and certainly by the end of the summer, we will see large parts of President Trump's trade policy fully in effect." The shift could give businesses greater clarity over the administration's long-term tariff structure, while increasing pressure on trading partners seeking to preserve access to the US$3.4 trillion U.S. import market. Trump's new forced-labor duties were imposed under Section 301 of the Trade Act of 1974, the same statute used against China during his first term. According to the Office of the U.S. Trade Representative, the new duties cover 99.4 percent of U.S. imports and largely replace a temporary 10 percent global tariff that expired on July 24. The move also restores part of Trump's "Liberation Day" tariff program, which imposed duties of between 10 percent and 50 percent on nearly every country before the Supreme Court ruled that the emergency law used to justify them exceeded presidential authority. The administration is also expected to use another Section 301 investigation into excess industrial capacity to rebuild additional tariffs affecting 16 major trading partners, including China, the European Union, Japan, South Korea, Mexico and Vietnam. Some businesses said the latest measures largely matched expectations. Mark Bissell, chief executive of Michigan-based vacuum maker Bissell Inc, said the company had not rushed to build inventory because it anticipated tariffs would remain within their current range. "We continued to run the business based on the belief that the tariffs would stay in the 10-15 percent range," Bissell said in an email to Reuters. Trump's tariff strategy has also generated significant revenue for the U.S. government, although refunds tied to court rulings have reduced some collections. Analysts say the growing reliance on tariffs could make them a lasting feature of U.S. fiscal policy. "The tariff wall is being rebuilt strong brick by strong brick, and it's very durable," said Josh Lipsky, chair of international economics at the Atlantic Council. U.S. Trade Representative Jamieson Greer told lawmakers this week that while the administration had changed the legal authorities it was using, its overall trade strategy remained unchanged. "The specific authorities this administration is using have changed, but the trade strategy has not," Greer told the U.S. Senate Finance Committee. Greer said tariff levels rebuilt under ongoing investigations would remain within caps negotiated in recent trade agreements, including 15 percent for the European Union, Japan and South Korea, while China would remain subject to the roughly 20 percent ceiling agreed by Trump and Chinese President Xi Jinping last November, in addition to tariffs imposed during Trump's first term. Despite the administration's effort to place tariffs on firmer legal footing, trade experts say Trump's willingness to announce new duties unexpectedly remains a source of uncertainty for businesses. "Trump's eagerness to impose tariffs to address a whole range of grievances will not only continue disrupting the global trading system but will have significant adverse effects on American households and businesses," said Eswar Prasad, a trade professor at Cornell University and former head of the International Monetary Fund's China department.