Japan Warns of Yen Action a Day Before U.S. Midterms After ¥27 Trillion of Buying in 2026

Photo: Nori Norisa, Wikimedia Commons, CC BY 4.0 (file photo, Oct. 7, 2025). The Ministry of Finance building in Kasumigaseki, Tokyo.

Japan will step into the currency market again if the yen swings out of control around Tuesday’s U.S. elections, Finance Minister Satsuki Katayama said in Tokyo on Monday, Nov. 2. The warning puts Japan yen intervention back on the table after a year in which Tokyo has already spent more defending its currency than in any year in Ministry of Finance records going back to 1991.

“If there are disorderly movements or excessively speculative moves, we will take action,” Katayama told reporters, according to Bloomberg, as published by The Japan Times. Kyodo News, in a report carried by The Mainichi, rendered the same line as “disorderly movements or excessive speculative moves.”

A pact with Washington that outlasts the vote

Katayama tied her pledge directly to Japan’s arrangement with the U.S. Treasury. “We have also been coordinating and holding discussions with the U.S. quite frequently, and I expect we will continue to respond in that way,” she said, per Bloomberg. Asked about the midterm elections, which will decide control of both chambers of Congress, she said: “But the president and his Cabinet members won’t change immediately. My counterpart will probably stay the same as well. We have issued a joint statement, and we will continue to act in line with it. That applies even at this very moment.”

Kyodo reported that she said she would keep working with Treasury Secretary Scott Bessent. The joint statement she cited, issued by the two finance ministers in September 2025, commits both sides to market-determined exchange rates while allowing intervention against disorderly volatility. Katayama also said concerns about the yen’s weakness were shared by President Donald Trump and Prime Minister Sanae Takaichi, pointing to their September summit, Bloomberg reported.

She declined to discuss specific exchange-rate levels, but said conditions had improved since the yen slid past 160 per dollar. That pact was last tested in mid-October, when officials in both capitals traded warnings at the IMF meetings in Bangkok, as our report on the U.S.-Japan currency pact detailed.

The July joint operation

Markets take the threat seriously because the two governments have already acted together this year. In an Aug. 3 statement, Katayama said the ministry “purchased the Japanese yen in coordination with the U.S. Department of the Treasury” on Friday, July 31, U.S. Eastern Time, and that Tokyo “will not hesitate to conduct further joint intervention.” The same statement said Japan plans to use the FIMA repo facility run by the Federal Reserve, which lets foreign monetary authorities raise dollars against their Treasury holdings.

Bessent confirmed the action at the time. “Friday’s coordinated foreign exchange actions countered disorderly yen movements,” he said, adding, “We will not hesitate to participate in further joint intervention,” CNBC reported. The yen had weakened to 163.73 per dollar on Thursday, July 30, before recovering to 157.57 the next day. Trump told reporters aboard Air Force One: “They wanted a little bit of help, and we’re always there for Japan.”

What the Finance Ministry data show

The ministry’s monthly release for April 28 to May 27 shows ¥11,734.9 billion of intervention, and the release for July 30 to Aug. 26, which covers the joint operation, shows ¥15,399.3 billion. Every other monthly period this year shows zero, including the latest release, dated Oct. 30, for Sept. 29 to Oct. 28.

By The Boston Report’s calculation from those releases and the ministry’s daily intervention records, which begin in April 1991:

• Japan has bought about ¥27.13 trillion of yen in 2026, against ¥15.32 trillion in all of 2024. That is ¥11.81 trillion, or 77%, more, and nearly three times the ¥9.19 trillion spent in 2022.
• It is the largest annual total of yen buying in the ministry’s published records. Before 2022, the biggest year was 1998, at about ¥3.05 trillion.
• The ¥6.28 trillion bought on April 30 is the largest single-day yen purchase in the daily records, ahead of ¥5.92 trillion on April 29, 2024. The daily breakdown for July through September has not been posted yet, so the July 31 amount on its own is not public.
• Bank of Japan figures show the dollar averaged 162.45 yen in July, the high for the year, then 156.23 in September. That is a drop of 6.22 yen, or 3.8%, in the dollar’s monthly average over two months.

Markets head into a holiday

The yen traded near 157.84 per dollar on Monday morning in Tokyo, Bloomberg reported. The dollar later touched close to 158 yen as investors squared positions before the vote, Kyodo reported. The Nikkei Stock Average closed down 208.25 points, or 0.33%, at 63,081.86, and the broader Topix fell 0.88% to 3,930.28.

Tokyo markets are closed Tuesday for Culture Day, so Japanese traders will be away while Americans vote. Nomura Securities strategist Maki Sawada told Kyodo that the elections, geopolitical risks afterward and a heavy run of corporate earnings were “prompting risk-off selling in some stocks, ahead of Tuesday’s market holiday in Japan.”

The currency remains a cost issue at home, where imported energy has helped drive record power bills and a new round of food price hikes. The central bank kept its policy rate unchanged last week, as covered in our report on the Bank of Japan’s October decision.

Katayama framed the goal as stability rather than any target. “What matters is firmly preventing excessive volatility, speculative moves and disorderly market movements,” she said, according to Bloomberg. “I believe both authorities remain absolutely committed to that in pursuit of our respective policy objectives.”

Sources

• The Japan Times (Bloomberg): Japan ready to respond to disorderly movements in FX market, Katayama says
• The Mainichi (Kyodo): Katayama pledges action on volatility after U.S. midterms
• Japan Ministry of Finance: Statement by Minister Katayama, Aug. 3, 2026
• CNBC: Japan and U.S. conduct coordinated yen-buying intervention
• Japan Ministry of Finance: Foreign exchange intervention, April 28 to May 27, 2026
• Japan Ministry of Finance: Foreign exchange intervention, July 30 to Aug. 26, 2026
• Japan Ministry of Finance: Foreign exchange intervention, Sept. 29 to Oct. 28, 2026
• Japan Ministry of Finance: Daily foreign exchange intervention records since April 1991 (CSV)
• Bank of Japan Time-Series Data Search: dollar/yen monthly average, Tokyo, 5 p.m. (FXERM07)
• The Mainichi (Kyodo): Tokyo stocks fall ahead of U.S. midterms and holiday

Additional sources

• Bloomberg’s analysis in the Japan Times piece says a Democratic sweep of Congress could constrain Trump’s fiscal agenda and potentially push down U.S. Treasury yields and the dollar while supporting the yen. That is Bloomberg’s analysis, not a statement by Japanese officials.
• Kyodo notes that the government has been concerned that the weak yen weighs on Japan’s energy-importing economy (The Mainichi).
• Bessent also said the U.S. “strongly support[s] Japan’s decisive market and monetary steps to correct the substantial undervaluation of the yen” (CNBC).