The US dollar dropped sharply against the Japanese yen on Monday, 3 August 2026, after Japan's Finance Ministry and the US Treasury carried out confirmed, coordinated market interventions to buy yen. The move matters because Japan's persistently weak currency has been fuelling domestic inflation by pushing up the cost of imports, and open acknowledgement of joint intervention by both governments is highly unusual, marking a rare moment of explicit cooperation between Washington and Tokyo on currency markets.

Before the intervention, the dollar had climbed above 163 yen, a 40-year high, but fell below 160 yen amid suspected buying and then dropped roughly 1% further to 156.34 yen once the action was officially confirmed. Japanese Finance Minister Satsuki Katayama confirmed her country's role, while President Trump acknowledged US involvement, describing relations with Japan as "a good relationship" and framing the intervention as beneficial to "the world economy" and to the US economy, since a stronger yen makes American goods more competitive in Japanese markets. Earlier attempts to prop up the yen in 2025 had little lasting effect, and commentators noted that such a public joint intervention had not occurred since Japan's 2011 earthquake and tsunami.