Donald Trump is urging the dismissal of Federal Reserve governor Lisa Cook, a move unlikely to strengthen Fed independence. Meanwhile, the US and Japan conducted a rare joint yen intervention, surprising markets. Economists like Costas Milas argue the yen is 21 per cent undervalued due to interest rate gaps between the BoJ (1%) and the Fed (3.5-3.75%). Japan’s central bank faces pressure to act, but Masayuki Nakajima of Mizuho emphasizes constraints on BoJ policy. Analysts Naohiko Baba at Barclays question if Treasury secretary Scott Bessent can delay intervention until December without market conflict.

The joint intervention aimed to stabilize the yen but its effectiveness is debated. The BoJ’s low rates contrast sharply with the Fed’s hawkish stance, exacerbating the dollar-yen imbalance. While Scott Bessent’s strategy reduces direct Treasury sales, its success hinges on market acceptance. Some analysts suggest pairing intervention with rate hikes for better impact, but the BoJ remains cautious.

US job data showed weak payroll growth (-23K vs. forecast 80K), yet labor market health remains resilient with low unemployment (4.1%) and strong job openings. The Fed is likely to prioritize inflation control over rate cuts. The yen’s decline reflects broader concerns about global currency coordination.

Experts stress that interventions alone cannot fix fundamental imbalances. The BoJ’s options are limited without rate adjustments, while the US continues to navigate its own fiscal and monetary challenges.