US Euro Sale Fuels ECB Coordination Questions Amid Yen Support

Washington and Tokyo have collaborated in an unprecedented move to prop up the yen. According to sources, the US sold euros from its foreign-exchange reserves to buy Japanese yen, but only informed the European Central Bank (ECB) after the transaction had been completed.

The disclosure adds a European dimension to the US intervention in the yen market first reported by the Financial Times on August 1. Instead of selling dollars to fund its purchases, the United States opted to sell euros.

People familiar with the matter cited by the Financial Times stated that Washington acted alongside Tokyo to support the Japanese currency. The ECB and Federal Reserve Bank of New York declined to comment on the matter.