On Tuesday, August 2, President Trump said the U.S. joining last week’s foreign exchange intervention that lifted the yen was a “friendship signal” to Japan—and, he added, a way to keep the global economy stable.
Speaking to reporters aboard Air Force One, Trump said Japan “needed a little help” and that the U.S. “always helps Japan.” He went on to tout the “great relationship” between the two countries, calling the intervention “more of a friendship signal”—then, out of nowhere, brought up Pearl Harbor again, joking that Japan “has always been good to us—except for Pearl Harbor.”
This isn’t the first time Trump has invoked Pearl Harbor recently. Back in March, during a White House meeting with Japanese PM Takaichi Sanae, he was asked why he didn’t give allies a heads-up before striking Iran militarily. His reply? “Surprise.” And then he pivoted to Japan’s sneak attack on Pearl Harbor, asking, “Who knows more about surprise attacks than Japan?”—leaving the room in awkward silence.
For context, Japan and the U.S. coordinated FX market operations last week, sparking a sharp rebound in the yen. Markets are now watching closely to see whether the two nations will keep intervening together. After Trump’s latest comments, the yen slipped slightly against the dollar.
Reports indicate Japan’s Ministry of Finance and the U.S. Treasury are working together on a scale rarely seen in decades to prop up the yen. That move has also raised the stakes for speculators betting on further yen depreciation.
The yen has been under heavy pressure recently. Japanese officials and the central bank have repeatedly voiced concerns about the rapid decline, worried that exchange-rate swings will push up import costs and squeeze household budgets. This joint intervention is seen as a significant step in U.S.-Japan monetary policy coordination.
Still, questions linger: will U.S. involvement change market expectations about free-floating exchange rates? And can the two countries sustain this kind of partnership going forward?
