The United States has intervened directly to prop up the value of the Japanese yen, buying billions of dollars' worth of the currency for the first time in almost 30 years. The move came as Japan struggled to halt an accelerating slide in the yen towards 40-year lows, a decline that has driven up import costs and deepened pressure on prime minister Sanae Takaichi, who faces growing political demands to curb inflation and revive economic growth.

The yen's fall stems from several factors: Japan's heavy reliance on Middle East energy imports, disrupted by the US war on Iran; the Bank of Japan's persistently low interest rates; and mounting government debt, now exceeding 200% of GDP, the highest in the G20. US treasury secretary Scott Bessent was seen with a note reading "Buy Japanese Yen $5-10 bil" before Donald Trump confirmed the intervention, calling it "good for the world economy." Analysts suggest Washington's real motive may be self-interested, since Japan has funded its yen-buying by selling US treasuries, a move that risks pushing up American borrowing costs.