Late last week, the Japanese yen fell past 160 to the dollar and kept going, briefly touching around 163 — its weakest level in roughly forty years. Then something happened that we have not seen in a long time. The United States and Japan stepped in together, executing their first coordinated currency intervention since 2011. Japan's Ministry of Finance spent on the order of $53 billion buying yen, the U.S. Treasury acted alongside it, and both governments signaled they will not hesitate to do more. President Trump said the United States was helping Japan as a gesture of friendship and to steady the world economy.
We have been sharply critical of this administration's foreign policy — of a habit of treating alliances as optional and going it alone. So when it gets something right, we are going to say so just as plainly. On this, it got something right.
Why a Falling Yen Is a Problem
A currency in freefall is not an abstraction. For Japan, a yen this weak drives up the cost of everything the country imports — energy, food, raw materials — and feeds directly into inflation that lands on ordinary households. It has become a genuine political problem for Prime Minister Sanae Takaichi's government, and an economic one for a nation that imports most of its fuel.
And it does not stay contained to Japan. A disorderly slide in a major world currency can trigger exactly the kind of volatility that unwinds trades, rattles markets, and spreads across borders in ways nobody fully controls once they start. Currency stability, like so much of the plumbing of the global economy, is boring and invisible right up until it breaks — and then it is the only thing anyone can talk about.
Credit Where It Is Due
Here is what makes this move the right kind of strength. It was coordinated, not unilateral. It treated Japan — our most important ally in the Pacific — as a partner whose stability is bound up with our own, rather than as a competitor to be lectured. And it used American financial weight to calm a situation rather than to inflame one.
This is, almost exactly, the kind of statecraft we have spent months arguing for on other fronts. Acting with allies is not charity and it is not weakness; it is how a great power multiplies its influence and shares its risk. A stable, confident Japan is worth far more to the United States than a wounded one, both economically and as the anchor of our security posture in a region where we are increasingly focused on China. Helping a friend steady its currency is cheap insurance on an expensive alliance.
The Honest Caveats
We are not going to oversell it, because that would not be fair either. Intervention is a tool, not a cure. The yen is weak for structural reasons — above all the wide gap between interest rates in Japan and the United States — and no amount of yen-buying fixes that underlying gap. Tokyo has now spent something like $150 billion propping up its currency since 2022, and the yen kept sliding anyway. Buying yen can buy time; it cannot substitute for the harder decisions about monetary and fiscal policy that ultimately determine what a currency is worth.
So the right way to read this is as stabilization, not solution — a sensible, well-executed step that calms a dangerous moment and buys room to address the fundamentals. Whether it works over the long run depends entirely on the follow-through.
The Common Sense Position
This is what competent, alliance-based economic statecraft actually looks like: act with your partners, stabilize rather than grandstand, and use a powerful tool for the specific thing it is good at. We wish more of our foreign and economic policy were conducted this way, and we will keep saying so when it is not.
But giving credit when it is earned is not a contradiction of that criticism — it is what makes the criticism credible. A steadier yen is good for Japan, good for the alliance, and good for a global economy that has enough to worry about right now. On this one: well done. Now do it consistently.