There have been rumors that the government might step in to help the Japanese Yen. In the most recent talk, South Korea also said that there might be a “coordinated intervention.”
It’s been over thirty years since the Japanese Yen was worth the least against the U.S. dollar. This is especially true since Japan recently raised interest rates. On top of that, the value of the South Korean Won has dropped to an all-time low. This has led to action on both fronts.
People in the US took action on their “serious concerns” about their currency. Also, the Treasury said that all three groups would “consult closely on developments in the foreign exchange market.”
James Brady, vice president of the advisory company Teneo, said that this would be another way for the two countries to work together, besides the ones they’ve already done.
Brady talked about the plan and said, “It is not unreasonable for markets to speculate on coordinated action given the unprecedented statement from Tokyo and Seoul expressing ‘serious concern’.
A shared currency has been backed by many as a way for both sides to gain politically and economically. Brady said that the United States needs to be a part of the action for this to really work and make a difference. He said that the currency would feel “a short-term bump” if the U.S. didn’t agree, but then it would go back to its normal path.
Ultimately, a lot of government leaders are optimistic about the two countries’ ability to work together and what it could mean for the good of both. While working together, the Bank of Japan and the Bank of Korea would decide what to do and agree on the currency.
