Goldman Sachs Dismisses Dollar Threat Over Joint Yen Intervention

Goldman Sachs has dismissed concerns that Washington's support for Japan's efforts to strengthen the yen could undermine the US dollar's status as a global reserve currency.

The bank argued that the recent joint intervention between the United States and Japan does not represent a meaningful threat to the dollar's standing, citing the structural advantages that have long underpinned its dominance.

Japan remains the largest foreign holder of US Treasury securities, with investments tied to a market valued at roughly $31 trillion.

The bank noted that the intervention was conducted through euro transactions rather than direct sales of US Treasuries, and that Japan has access to the Federal Reserve's Foreign and International Monetary Authorities (FIMA) repo facility, which allows foreign central banks to obtain dollar liquidity by temporarily exchanging Treasury securities rather than selling them outright.

Goldman Sachs also highlighted the depth and liquidity of U.S. capital markets as one of the dollar's enduring strengths.