The U.S. Treasury intervened in currency markets on Friday to support the yen, according to reporting by the Financial Times. The Federal Reserve Bank of New York executed sales of euros in exchange for yen on behalf of the Treasury through Goldman Sachs and Morgan Stanley, though the specific volume of the transaction was not disclosed. Earlier that day, the Treasury had alerted multiple banks to prepare for potential market intervention.
A photograph of Treasury Secretary Scott Bessent’s notepad, taken during a cabinet meeting, contained a notation indicating consideration of purchasing between $5 billion and $10 billion in Japanese yen. Neither the Treasury Department nor the Federal Reserve Bank of New York provided immediate comments regarding the reports of intervention activity.
The dollar’s exchange rate moved notably in response to intervention news, declining to approximately 157.6 yen in late afternoon trading from around 158.9 yen earlier in the session. Prior to the intervention, the U.S. dollar had reached nearly 164 yen, its highest level since 1986. According to central bank data released Friday, Japan had also undertaken substantial currency intervention on Thursday, potentially selling as much as $58.97 billion to purchase yen. Japanese officials subsequently intervened again during New York trading hours on Friday.
Reporting indicated that Japan and the United States may announce coordinated policy measures as early as the following week aimed at addressing the yen’s persistent weakness and cautioning against speculative trading activity. Japan’s Finance Ministry stated on social media that monetary authorities possessed multiple tools to address market liquidity challenges and remained prepared to deploy them to support orderly market conditions. The ministry noted potential access to the Federal Reserve’s Foreign and International Monetary Authorities repo facility, which was established in 2020 and enables Japan to obtain dollar liquidity without requiring outright Treasury sales.
This represented the first direct U.S. support for the yen in more than a decade, with the prior joint intervention occurring in 2011 following Japan’s major natural disaster and resulting financial market disruptions.
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