US Treasury and Japan Intervene to Support Yen
The US Treasury Department has joined forces with Japan to intervene in currency markets and prop up the yen. This joint operation is seen as an extraordinary step, with the last coordinated intervention between the two countries occurring after Japan's devastating earthquake and tsunami in 2011.
The yen was trading at nearly 164 against the dollar before the intervention, but has since recovered to around 157. It's estimated that Japan may have spent up to $36.58 billion buying yen during this operation.
According to Moody's Analytics economist John Bromhead, 'For Washington, supporting the yen is relatively low-cost insurance.' The US Treasury is helping Japan avoid a potentially destabilizing liquidation of US debt by intervening in currency markets.