In the New York foreign exchange market, the yen-dollar exchange rate plummeted more than 2% in just 50 minutes, temporarily falling to 157.80 yen, marking an unprecedented situation estimated to be the result of an "exceptional Japan-US coordination" involving Japan's direct intervention to defend against yen weakness and the US "rate check" occurring simultaneously, foreshadowing enormous repercussions across global financial markets.

After 10:30 PM Japan time, the yen-dollar exchange rate in the New York foreign exchange market fell more than 2% in about 50 minutes from 162.8 yen, temporarily dropping to 157.80 yen. This is analyzed as a strategic intervention that capitalized on the timing when dollar weakness became visible following the Federal Reserve's hold on the benchmark interest rate.

Specifically, Japan is reported to have directly intervened in the foreign exchange market through buying yen and selling dollars. Japanese Finance Minister Katayama Satsuki, conscious of past limitations where she failed to reverse yen weakness despite deploying 12 trillion yen over the past month, appears to have urgently requested coordination with the United States this time. US monetary authorities supported Japan's intervention by conducting a "rate check" following instructions from the US Treasury Department and requests from the New York Federal Reserve. This rate check, led by US Treasury Secretary Scott Bessent, was also implemented in January, demonstrating that US authorities have consistently maintained vigilance regarding yen weakness.

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This Japan-US coordination contrasts with Japan's past unilateral intervention, which failed to achieve a yen appreciation effect despite the massive injection of 12 trillion yen. In particular, this intervention is evaluated as deploying a different "strategic card" from the past, having utilized the timing of dollar weakness due to the Fed's interest rate hold.

However, the yen-dollar exchange rate has risen back to around 159.54 yen as of 6 AM on July 31, with some of the intervention effect reversed. Market attention is now focused on the Bank of Japan's monetary policy decision meeting this morning. While the Bank of Japan is expected to maintain the policy interest rate at "around 1.0%" in this meeting, what stance it takes on future rate hikes is expected to be the key variable determining the next direction of the yen exchange rate.

Whether this simultaneous Japan-US intervention will be a decisive turning point in reversing the chronic yen weakness trend or merely produce temporary effects appears likely to be determined by the Bank of Japan's policy decision. The global financial market is watching with bated breath for the Bank of Japan's announcement.