US and Japan Conduct Largest Currency Intervention in History to Support Yen
The US and Japan have conducted the largest currency intervention in history to support the yen. On Thursday, Japan deployed an estimated $53 billion, or ¥8.45 trillion, to defend the yen, which is likely the largest single-day currency intervention on record.
The move came as the yen surged as much as +3.3% against the US dollar, its biggest intraday gain since December 2023. Japanese authorities bought yen and sold dollars during New York trading on Friday, while the US Treasury Department reportedly sold euros to buy yen on behalf of the US Treasury.
Nicholas Mugalli pointed out that this intervention is not a typical 'bilateral cooperation' but rather a de facto bailout of the BOJ's broken FX framework. Japan's central bank has been trapped between runaway imported inflation and an unserviceable sovereign debt load, leading to a need for external help.