Japan's Yen Intervention Puts Squeeze on US Treasury Market

Japan's efforts to defend its currency have put pressure on the U.S. bond market, raising concerns about potential Treasury sales. In a bid to stabilize the yen, Tokyo spent ¥15.4 trillion (~$100 billion) between July 30 and August 26.

The intervention helped pull the yen back toward ¥155 per dollar but coincided with the largest monthly decline in Japan's foreign exchange reserves on record, a drop of $79.6 billion in August.

As a result, traders are watching whether further currency intervention will require additional sales of foreign securities, including U.S. Treasuries.

The 10-year and 30-year U.S. Treasury yields have risen to near 4.8% and 5.3%, respectively, raising bond-market risks.