US Joins Japan in Yen Intervention Using Euros
The United States joined Japan's currency defense last week by buying yen on behalf of the U.S. Treasury, but instead of selling dollars to fund the purchase, it sold euros through Goldman Sachs and Morgan Stanley.
The move was made in response to the yen's sharp decline against the dollar, which fell to 163.73 per dollar on July 30, its weakest level in nearly four decades.
According to Reuters, Treasury Secretary Scott Bessent's legal pad during a Cabinet meeting at Camp David read 'buy Japanese yen, $5-10 billion', suggesting that Washington's contribution was smaller than Japan's.
The intervention appears to have stabilized the yen, which recovered to 157.57 by Friday's close and traded around 156.49 on Monday, but some experts warn that coordinated intervention can be counterproductive and may weaken confidence in the yen rather than restoring it.