When it comes to the Japanese Yen, there have been thoughts about stepping in. South Korea has recently joined the talk and said that there might be a “coordinated intervention.”
Before Japan recently raised interest rates, the Japanese Yen was worth a lot more than the U.S. dollar. Now, it’s worth even less than it did thirty years ago. At the same time, the value of the South Korean Won has dropped to an all-time low. This has led to action on both fronts.
The US took care of the “serious concerns” about their currency. The Treasury also said that all three groups would “consult closely on developments in the foreign exchange market.”
Vice President of advisory company Teneo James Brady said that this would be yet another way for the two countries to work together, adding to the many times they have already done so.
In response to the plan, Brady said, “It is not unreasonable for markets to speculate on coordinated action given the unprecedented statement mentioning ‘serious concern’ on the part of Tokyo and Seoul.”
There are many people who think that a shared currency would be good for both the economy and the politics of both sides. Brady said that the US needs to be a part of the action for this to really work and make a difference. If the U.S. doesn’t agree, he said, the currency will get “a short-term bump, before the yen returns to its previous path.”
In the end, a lot of government officials are optimistic about the two countries’ ability to work together and what it could mean for the good of both. That choice would be made by both banks, the Bank of Japan and the Bank of Korea, working together to agree on the currency.