Japan's Finance Minister Shunichi Suzuki stated that if necessary, Japan will closely coordinate with US authorities to take appropriate action against exchange rate fluctuations. Following these remarks, the USD/JPY exchange rate experienced a brief surge.

Minister Suzuki made these comments after the G7 finance ministers' meeting. When asked whether the Japanese government had conducted market intervention or rate checks, she responded that they would continue to take appropriate action as needed and would maintain close cooperation with the US in strict accordance with the spirit of last September's joint statement by the Japanese and US finance ministers, but declined to comment on the day's specific exchange rate movements. On Tuesday evening, the USD/JPY rate at one point fell by over 1 yen, heightening market expectations that Tokyo might be on the verge of implementing yen-buying intervention measures. As of the time of writing, the USD/JPY rate was at 153.19. An unconventional market operation last Friday has drawn significant attention to the possibility of a joint US-Japan intervention in the currency market. According to sources familiar with the matter, the New York Fed, acting on instructions from the US Treasury, solicited real-time USD/JPY rate quotes from several major financial institutions. Such inquiry operations are typically viewed as a precursor signal that authorities are considering direct market intervention. Some analysts even suggest this could be a significant indication that the US is willing to assist Japan in stabilizing the yen. The market reacted swiftly, widely interpreting this as a sign that the two countries may have reached a consensus on curbing the yen's depreciation, triggering substantial short-covering of yen positions. It is noteworthy that direct US involvement in the foreign exchange market is extremely rare. According to public records from the New York Fed, the US has only intervened in the currency market during three distinct periods since 1996, with the most recent occurrence happening after the 2011 Japan earthquake, when the US acted in coordination with other G7 nations by selling yen to stabilize market order. The yen showed a corrective trend during today's Asian trading session. Earlier, driven by expectations of potential US-Japan coordinated intervention, the yen had appreciated significantly. However, market analysts point out that the recent rebound has partially alleviated the downward pressure on the yen, potentially reducing the urgency for authorities to take emergency intervention measures in the short term. Previously, the yen had been on a sustained weakening trend, approaching the key psychological level of 160 yen per US dollar. The government's announcement of plans to freeze the food consumption tax for two years, a fiscal commitment, sparked market concerns about the sustainability of Japan's debt. The interwoven volatility in the yen exchange rate and the Japanese government bond market presents a dual challenge for the incumbent government, which faces an upcoming general election, to maintain market confidence. As intervention expectations continue to influence market sentiment, several institutions are analyzing and assessing the potential new equilibrium range for the USD/JPY rate. A key consensus is gradually forming in the market: the 147-149 range is expected to become an important technical zone that could attract substantial buying support in the medium term. Kristian Brauten-Smith, a trader at Goldman Sachs, noted that given the potentially more lasting impact of this potential intervention, and considering that other G10 currencies have already appreciated by approximately 10% against the dollar from their previous levels, the USD/JPY rate may need to retreat to the 147-149 range to once again attract firm, allocation-type buying interest. This technical assessment is also supported by fundamentals—Goldman Sachs calculations indicate that a level around 147 is roughly in line with the exchange rate's fair value implied by the 10-year real interest rate differential.