US Treasury informed banks that it may intervene in Japan's yen: Reuters
Reuters said Treasury told banks to stand ready for action as Japanese authorities also stepped in, helping the yen rise 0.8% against the dollar.
- On Friday, the United States Treasury intervened in currency markets by selling euros to buy Japanese yen, marking Washington's first joint yen-buying action with Tokyo in over a decade.
- Treasury Secretary Scott Bessent signaled the move during a cabinet meeting at Camp David, Maryland, where his notepad displayed the handwritten directive: "To Do Buy Japanese Yen $5-10 bil."
- The Federal Reserve Bank of New York executed the trade through Goldman Sachs and Morgan Stanley, helping the yen rebound to about 157.6 against the dollar from near 164 in recent weeks.
- Japan intervened Thursday to address historic lows, with officials posting that monetary authorities maintain "a broad range of tools to address market liquidity needs," including potential FIMA repo facility access.
- Kyodo News reported Saturday that the United States and Japan may unveil a coordinated policy as early as next week to address the yen's weakness and deter speculative market bets.
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The $1.2 Trillion Reason Scott Bessent Just Bought Japanese Yen
A handwritten note spotted on a Treasury Secretary's legal pad during a Cabinet meeting set off a chain of events connecting Tokyo's currency markets to the mortgage payment on your home. The link between Japan's weakening yen and American borrowing costs is hiding in plain sight.
Yen Traders Brace for More Intervention With US at Japan’s Side
Currency traders are on high alert for more joint intervention by Japan and the US when trading gets underway in Asia on Monday after coordinated operations in Tokyo and New York last week triggered a dramatic rebound in the yen.
The US and Japan have jointly intervened in the foreign exchange market to stop the yen crash. For German exporters, the action is directly relevant.
Such coordinated Treasury intervention would be a first in nearly 30 years, according to the American newspaper.
To stop the yen's fall in value, Tokyo and Washington resort to a rare measure. According to insiders, both states massively buy the Japanese currency. A notepad entry by the US Treasury Secretary could confirm this.
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