US Sells Euros to Bolster Yen, Avoid Treasury Market Risk

The US intervention to bolster the yen last week may have more global significance than it initially seems.

According to reports, Washington sold euros instead of dollars to fund the currency-buying operation, weakening the greenback against the euro.

This move is likely aimed at avoiding a scenario where Japan would need to dump large quantities of Treasurys to finance the intervention, which could destabilize the sensitive Treasury markets.

The euro has strengthened to a high of 1.1558 against the greenback on Monday, hitting its strongest level in almost two months.