We have used dc magnetization to measure the temperature dependences of the coercivity, squareness and maximum energy product for YCo5(70 wt%)/Y2Co17(30 wt%) nanocomposite powders synthesized by mechanical milling and subsequent annealing. Our data show that all the above magnetic quantities have values that monotonically increase upon cooling within the 295–3K temperature interval. On the other hand, hysteresis loops collected at low temperatures exhibit a ‘knee’ in the second quadrant of the demagnetization curve, which suggests that the inter-grain exchange coupling becomes less effective as the temperature is lowered. This cooling-induced weakening of exchange coupling, which is somewhat not expected to coexist with the magnetic property enhancement, is confirmed by the temperature dependence of the exchange-coupled volume ratio. Furthermore, the observed temperature behaviour of the coercive field yields evidence that the magnetostatic (dipolar) interactions are strengthened at low temperatures. We explain the low-temperature magnetic property enhancement by anisotropy modifications and the reduction of thermal fluctuations upon cooling, which compete with the weakening of exchange coupling and the enhancement of demagnetizing dipolar interactions.