Treasury Yields and Yen Rebound After Joint US-Japan Intervention

Rising global bond yields and firmer oil prices have pushed 30-year US Treasury yields back to pre-buyback levels. The USD/JPY has largely retraced its post-intervention slump, following joint US-Japan intervention on July 31.

Treasury Secretary Scott Bessent framed the buybacks and yen intervention as signals rather than attempts to dictate market prices. He emphasized that the government is looking at fundamentals and not allowing the market to dictate policy.

According to Brown Brothers Harriman's (BBH) Elias Haddad, these signals have effectively capped longer-term yields and USD/JPY, raising the cost of betting against Treasuries or the Japanese Yen. This logic likely applies to the yen intervention as well.