Japan- US Joint Intervention Expectations Lift Yen, Nikkei 225 Down 2%

Akira Ito
26 Jan, 2026
Tokyo

Japan's indexes plunged in Monday's trading, extending last week's losses amid growing worries about the yen's stability.

The Nikkei 225 Stock Average decreased 1.9%, the Topix declined 2%, and the yen rebounded 1.1% to 153.99 against the U.S. dollar.

On Sunday, Prime Minister Sanae Takaichi reiterated her government's resolve to shore up the faltering yen, and she added that the finance ministry will take "necessary steps" to counter speculative market moves.

The yen's upward move was further supported by reports that the U.S. Federal Reserve and the Bank of Japan are looking to conduct joint action to support it. 

The additional momentum came after reports that the New York Federal Reserve checked dollar/yen holdings with dealers on Friday, widely perceived as a preparatory move ahead of a potential joint intervention in the foreign exchange market. 

Rising U.S.-Iran tensions and friction between Europe and the U.S. over Greenland's sovereignty also contributed to market jitters, driving precious metals to new record highs.  

Gold crossed $5,000 an ounce and extended 2026's rise to 17% as investors worried about a possible U.S. government shutdown and persistent rise in federal government debt.  

The safe haven and investment demand drove silver to a record high of $108 an ounce and extended this year's gains to 44%.

 

Japan Indexes and Stocks 

The Nikkei 225 Stock Average dropped 1.9% to 52,849.21, and the broader Topix Index decreased 2.1% to 3,555.09. 

Financial and technology stocks led decliners in Tokyo trading on Monday's trading. 

Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial, and Mizuho Financial declined between 2.0% and 3.0%, and Softbank Group, Tokyo Electron, and Advantest Corp. fell between 1% and 6%.