Japan Has Yen Intervention Funds 'Plenty' After $1 Trillion Reserve Boost
Japan's $1 trillion in US dollar reserves has given it 'plenty of capacity' for further yen interventions, according to Goldman Sachs. The bank estimates that around $200 billion of these reserves are in cash or cash equivalents, which could be used for another couple of rounds of intervention similar to the one seen last month.
Last month's intervention was historic, with near-record size purchases, and Goldman's Karen Fishman said on the bank's Exchanges podcast that Japan already has 'enough to do another couple rounds' of this scale. This comes as the yen has resumed its weakening trend despite a massive intervention at the end of July.
The US also joined in with its own intervention, paying for it in euros and not discussing it with Europe beforehand. The New York Fed bought yen on behalf of the US Treasury, but did not sell dollars to fund these purchases. This has raised questions about why the yen is weakening so quickly after such a significant intervention.