Japan, with U.S. backing, has intervened in currency markets to support the weakening yen. Analysts, however, express doubt about the long-term effectiveness of the intervention, pointing to structural economic issues. Meanwhile, U.S. markets are buoyant, with the S&P 500 nearing a record high and Amazon surpassing a $3 trillion market cap, while President Trump comments on oil company profits.
Yen Intervention: Will Japan and U.S. Joint Action Sustain Currency Strength?
Singapore – August 3, 2026 – In a significant move to bolster the Japanese yen, Tokyo has partnered with Washington for a coordinated currency market intervention, the first in 15 years. While the joint effort has provided a temporary reprieve for the yen, experts are questioning its long-term effectiveness, citing structural economic factors and past experiences where similar interventions proved short-lived. Meanwhile, U.S. markets continue their upward trajectory, fueled by a tech rally, with the S&P 500 nearing its all-time high, and Amazon crossing the $3 trillion market cap milestone.
What You Need to Know Today
Japan's past attempts to support its currency have often been undermined by persistent rate differentials and weak economic fundamentals. However, the recent intervention marks a departure by involving the U.S. Treasury, adding considerable weight to the action and potentially giving speculators pause.
The U.S. is backing this effort with substantial support. Treasury Secretary Scott Bessent is advocating for the Federal Reserve to expand a key lending facility, enabling Japan to intervene without destabilizing the U.S. Treasury market. Despite this robust backing, analysts remain skeptical about the sustainability of the yen's strength. Strategists from UBS, Teck Leng Tan and Dominic Schnider, note that Japan's current policy mix is unlikely to generate sustained yen appreciation. Other experts emphasize that without addressing the underlying structural issues driving yen weakness, the intervention's impact may be ephemeral.
In domestic markets, all three major U.S. stock indexes saw gains, driven by continued strength in technology stocks. The S&P 500 is now just 0.3% shy of its previous all-time high set in early June.
Amazon's stock surged 4% on Monday, pushing its market capitalization past the $3 trillion mark for the first time. This milestone follows a better-than-expected second-quarter earnings report last week, marking the best trading day for Amazon since May 5.
Adding to the market narrative, President Donald Trump commented on the substantial profits reported by energy giants Exxon and Chevron for the second quarter. He stated that the companies had made "too much money" from rising crude oil prices, exacerbated by the conflict in Iran, expressing his disapproval.
And Finally...
Hugging Face CEO believes China is leading the AI race with open-source models.
Clément Delangue, CEO of Hugging Face, has asserted that China is currently winning the artificial intelligence race, particularly in the development of open-weight models. He predicts that China could rival U.S. model makers at the frontier of AI development as early as this year, given the rapid pace of progress.
Delangue highlighted China's advantage in its collaborative and open sharing ecosystem for AI development. In contrast, he suggested that U.S. model makers are operating in "silos," potentially hindering their competitive edge.
— Reported by Lim Hui Jie and Anniek Bao
