- The U.S. Treasury bought yen on Friday to support the battered Japanese currency, marking Washington's first yen-buying intervention with Tokyo in more than a decade as it languished near 40-year lows; the report did not indicate any amounts purchased.
- Japan may have sold as much as $58.97 billion to buy yen on Thursday, and Tokyo intervened again in New York trading hours on Friday, the Nikkei reported.
- The Federal Reserve Bank of New York sold euros for yen on behalf of the Treasury through Goldman Sachs, the Financial Times (FT) said, citing people familiar with the matter.
- Earlier on Friday, the Treasury informed banks it might intervene in the yen market and that they should "stand ready for future action"; a Reuters photo of Treasury Secretary Scott Bessent's notepad showed "Buy Japanese Yen (JPY) $5-10 bil."
- Japan's monetary authorities posted on X that they have "a broad range of tools to address market liquidity needs" and remain prepared to use available tools, including potential access to the Federal Reserve's standing Foreign and International Monetary Authorities (FIMA) Repo Facility; introduced in 2020 during the Covid-19 pandemic, the facility allows Japan to raise dollar liquidity without outright sales of U.S. Treasuries.
- Japan and the United States may unveil a policy as early as next week to address the yen's weakness, Kyodo News reported; the announcement would serve as a warning against speculative bets.
- The dollar dropped to about 157.6 yen from 158.9 yen just before 5 p.m. EDT, after having risen in recent weeks to nearly 164 yen, its highest since 1986.
The U.S. Treasury's intervention in the yen market marks a significant move to support Japan's currency, which has been struggling against the dollar. On Friday, the Treasury bought yen, a first since 2011, as the dollar had recently surged to nearly 164 yen, its highest since 1986.121314
Japan's central bank has also been active, reportedly selling as much as $58.97 billion to bolster the yen. The intervention aims to stabilize the currency amid speculative pressures, with the U.S. Treasury notifying banks to prepare for further actions.34
The Federal Reserve Bank of New York facilitated the yen purchases through Goldman Sachs, although specific amounts were not disclosed. Market analysts suggest that the coordinated efforts between the U.S. and Japan could signal a broader strategy to address currency volatility.5
Japan's monetary authorities have indicated they possess a range of tools to ensure market liquidity, including potential access to the Federal Reserve's FIMA repo facility. This facility allows Japan to secure dollar liquidity without selling U.S. Treasuries, easing funding pressures for intervention.
The recent actions reflect a growing concern over the yen's depreciation, which has prompted both nations to take steps to stabilize the currency and prevent further market destabilization.
“The New York Fed sold euros for yen on behalf of the Treasury through Goldman Sachs; the dollar fell from about 158.9 yen to 157.6 yen after nearing 164 yen, its highest since 1986. Japan may have sold $58.97 billion Thursday; Scott Bessent's notepad read "Buy Japanese Yen (JPY) $5-10 bil."”
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