Treasury Backs Yen in Coordinated Effort with Tokyo

The US Treasury has intervened in the currency market to support the battered yen, marking its first direct action since 2011. According to the Financial Times, the Treasury conducted a sale of euros to buy yen on behalf of the US government through Goldman Sachs and Morgan Stanley. The move is part of a coordinated effort between Washington and Tokyo to stabilize the markets after Japan's currency reached 40-year lows.

The Federal Reserve Bank of New York was involved in the transaction, which was conducted at an unspecified amount. This intervention comes after Japan sold as much as $58.97 billion to buy yen on Thursday, signaling repeated efforts to stem the yen's weakness.

News of the potential intervention by the Treasury helped push the yen higher against the dollar on Friday from near 40-year lows earlier this week. The dollar dropped from about 158.9 yen at around 4:14 p.m. EDT(2014 GMT) to about 157.6 yen just before 5 p.m. EDT (2100 GMT), a drop of about 0.8%.

The Treasury did not immediately respond to requests for comment on the FT report, while Goldman Sachs declined to comment. The New York Fed and Morgan Stanley also did not respond outside regular business hours.