First Insights: JPY: US backs Japan’s JPY defense

Research evidence excerpt

First Insights: JPY: US backs Japan’s JPY defense

Global Markets Research

2 August 2026First Insights

Foreign Exchange - Global

Research Analysts

JPY: US backs Japan’s JPY defense Global FX Strategy

Yujiro Goto - NSC

EUR/JPY-selling intervention by the US may signal stronger cooperation yujiro.goto@nomura.com

with Japan; BOJ rate hike expectations may weigh on USD/JPY +81 3 6703 1120

• As widely reported, the US Treasury sold EUR/JPY, joining Japan’s efforts to curb

JPY depreciation. Although this remains officially unconfirmed, US officials’ comments

and reported rate checks already suggest increasing US support.

• We think US cooperation may increase pressure on Japan to accelerate monetary-policy

normalization, raising market expectations for an earlier BOJ rate hike. The US may be

concerned that JPY weakness could fuel inflation and destabilize bond markets.

• We estimate that Japanese authorities may already have spent approximately

JPY10trn on JPY-buying intervention. If coordinated intervention is confirmed, we

expect further unwinding of large JPY-short positions could push USD/JPY below, or

at least toward, 155.

Reported US intervention selling EUR/JPY

The FinancialTimes reported that the US Treasury conducted an intervention to sell EUR

against JPY through the NY Fed on 31 July. Reuters also reported that, during the

Cabinet meeting on 31 July, a memo from Treasury Secretary Bessent’s notepad was

photographed that stated, “buy Japanese Yen (JPY) $5-10bn.” Reuters reported that

Finance Minister Katayama is making arrangements to speak to reporters as early as 3

August to explain the efforts by Japan and the US to correct the yen’s depreciation. At this

stage, it remains unclear whether the US actually joined Japan in coordinated JPY-buying