August 2-Foreign media quoted sources as saying that Japanese Finance Minister Katayama Moon is expected to announce on August 3 that Japan and the United States have jointly intervened in the foreign exchange market to prevent the yen from falling to its lowest level in 40 years.

Photograph: Archives of Hong Kong China News Service

Two Japanese government officials told Reuters that Katayama would underscore the determination of both Japan and the United States to curb what they see as excessive yen depreciation. A source confirmed that the two countries had taken "joint action" and said the intervention was still ongoing.

Japan's finance ministry and the U.S. Treasury have not responded to Reuters requests for comment.

market sources said that japanese and us authorities have recently bought the yen several times. This is the first joint intervention in the foreign exchange market between the two countries since 2011, aiming to promote the appreciation of the yen, which fell to its lowest level against the US dollar since 1986.

On July 30, the yen suddenly surged, up as much as 3.3 per cent. According to the data released by the Bank of Japan on July 31 and the forecast of foreign exchange brokers, Bloomberg estimated that the Japanese authorities used 8.45 trillion yen (about 158 yen to the US dollar) to support the yen exchange rate on the 30th. If accurate, it would be the largest intervention by Tokyo authorities in a single day.

U.S. Treasury Secretary Bethant said last week that he thought the yen "appears to be grossly undervalued". Photos taken by Reuters showed that when Besente attended a cabinet meeting on July 31, the to-do list in his notebook read: "Buy 5 billion to 10 billion yen."

It is also reported that the US Treasury Department has notified a number of banks to intervene in the yen market and instructed them to prepare for follow-up actions.

The report pointed out that the depreciation of the yen also means that the dollar is relatively stronger, which may not only aggravate the US trade imbalance, but also trigger financial market volatility. The joint purchase of yen by Japan and the United States can amplify the impact of the intervention and send a signal to the market that the two countries will work together to curb the continued sharp decline of the yen.