The U.S. Treasury, through the Federal Reserve Bank of New York, reportedly intervened to support the Japanese yen by selling euros and buying yen, according to sources familiar with the matter cited by the Financial Times. This action, involving Goldman Sachs and Morgan Stanley, came after Japan's own significant efforts to prop up its currency. Data indicated Japan may have sold as much as $58.7 billion to buy yen on Thursday, signaling repeated attempts to stem the yen's weakness. The Treasury also informed several banks of its potential intervention.
Further evidence of U.S. intervention emerged from a Reuters photograph taken at a cabinet meeting at Camp David. The photo showed Treasury Secretary Scott Bessent's "to-do" list, which included the underscored words "Buy Japanese Yen (JPY) $5-10 bil." This visual confirmation, captured at 11:33 AM ET, followed earlier reports that the Treasury had notified banks of possible intervention in the yen market on Friday. The U.S. Treasury has not intervened to support the yen since 2011, when it joined other G7 countries in a coordinated action after a devastating earthquake and tsunami in Japan.
Both Japanese and U.S. interventions appear to have impacted the yen's value. Japanese authorities intervened in the Tokyo foreign exchange market on Friday, causing the yen to strengthen significantly. Later in the day, coinciding with reports of U.S. involvement, the yen saw another substantial strengthening against the dollar. LSEG data showed the dollar dropping approximately 0.8% in about 40 minutes, from around 158.9 yen at 4:14 PM ET to about 157.6 yen just before 5 PM ET. This combined effort marks the first time since 1998 that Japan and the United States have reportedly cooperated through direct purchases to support the yen.
