Japan and the U.S. just spent billions to try to save the yen. Why is it already losing ground?

Washington and Tokyo’s unprecedented step to bolster the yen already appears to be unraveling.

On July 30, Japan’s finance ministry reportedly sold as much as $59 billion to buy the Japanese currency, then at 40-year-lows. Tokyo and Washington later confirmed they had acted together to bolster a weak yen. It was the first time they did so since 1998, and both U.S. Treasury Secretary Scott Bessent and Japan’s Finance Minister Satsuki Katayama pledged to do it again if needed.

The yen began the year at 156 to the dollar, before steadily weakening to 163 by late July. Post-intervention, the yen strengthened to 157 to the dollar, only to fall back to 159 by August 11, meaning the yen has already lost half of its post-intervention gains.

Economists point out that the U.S.-Japan intervention—as significant as it may be—doesn’t tackle the underlying rea...