Half-Trillion-Dollar Intervention Unwinds Without Support

The largest Yen-buying operation in history, which saw Tokyo and Washington jointly intervene to prop up the currency, has seen half of its effects reversed. The Dollar now trades at 159.50 against the Yen, just above the low set by the intervention, with estimates suggesting around 5.3 trillion Yen was bought on top of an initial 8.45 trillion.

The operation aimed to stabilize the currency and support Japan's economy. However, despite being one of the largest interventions in history, half of its effects have already been reversed as the market unwinds without further government intervention. The combined effect of the operation was a drop from just short of 164.00 to just above 155.00.

The Ministry of Finance will publish the full details of the intervention next month, but traders expect it to show that Tokyo and Washington spent a total of around 13.95 trillion Yen in support of the currency. The operation was seen as a key move by the two governments to stabilize the global financial system.