Forex
US Joins Yen Defense with Unconventional Euro Move
The United States has joined forces with Japan to defend its currency, and it's done so in an unconventional way. The Federal Reserve Bank of New York bought yen on behalf of the U.S. Treasury last Friday, July 31, but instead of selling dollars to fund the purchase, it sold euros.
The trades were routed through Goldman Sachs and Morgan Stanley, two major financial institutions. Japan's Ministry of Finance confirmed the joint operation on Monday, August 3, citing its goal as countering disorderly moves in the yen.