Japan-U.S. Yen Intervention Sparks Rift with Europe Over Unconventional Euro-Selling

The coordinated Japan-U.S. intervention on July 30-31 was estimated at approximately ¥8.45 trillion, marking the first such joint effort in 28 years since 1998.

Japan executed a yen-buying intervention during the Bank of Japan's monetary policy meeting outside Tokyo market trading hours, with Vice Finance Minister for International Affairs Atsushi Mimura issuing the order to Foreign Exchange Markets Division staff over speakerphone.

The U.S. Treasury Department joined in on July 31, making it a coordinated intervention that neither country publicly announced, instead using a Financial Times report and a memo from Treasury Secretary Scott Bessent as evidence.

However, the problem lies in the fact that the United States funded its yen purchases by selling euros rather than dollars, which some senior ECB officials viewed as 'an unprecedented breach of long-standing convention' regarding cooperation among Western monetary authorities.