US Treasury Accused of Secretly Buying Up Japanese Yen

The US Treasury has been accused of secretly buying up Japanese Yen in the foreign exchange market. The operation, which began on Thursday and continued into Friday, involved selling dollars in three separate lurches, with no claims or denials from any party involved.

According to a report by TMGM trading, the Treasury warned banks through the New York Fed to stand ready for further action on Friday. The move is seen as an attempt to weaken the Yen and boost the US dollar.

The operation itself is estimated to be worth around 53 billion dollars, making it the largest single day of intervention by Tokyo in history. However, experts point out that this figure may not be entirely accurate, as the Treasury's actions are designed to be deniable.

The Japanese economy has been struggling with a strong Yen, which makes its exports less competitive on the global market. The country's central bank, the Bank of Japan (BoJ), has implemented ultra-loose monetary policy in an attempt to weaken the currency. However, this move has been met with resistance from other major central banks, leading to a widening policy divergence.

The BoJ's stance on currency control is key to understanding the Yen's value. The bank has directly intervened in currency markets in the past, but refrains from doing so often due to political concerns of its main trading partners.