US and Japan Intervene to Support Yen Amid Prolonged Decline
The US Treasury and Federal Reserve Bank of New York have intervened in the foreign exchange market to support the Japanese yen, marking Washington's first coordinated operation with Japan since 2011. The intervention aims to stabilize a currency that has fallen to its weakest level in nearly 40 years.
The move follows Japan's own intervention on July 30 after the yen weakened to around 164 per US dollar, prompting concerns over imported inflation and higher energy costs. Reuters reported that this is the first US operation to support the yen since the 2011 G7 intervention following Japan's earthquake and tsunami.
The US Treasury bought yen by selling euros through Goldman Sachs and Morgan Stanley, with neither the Treasury nor the New York Fed disclosing the size of the operation. Japan's top foreign exchange official said authorities remain prepared to respond to excessive currency movements, suggesting the country had received support from US counterparts that extended beyond 'psychological support.'