US Treasury Buys Yen to Stem Currency Decline
The US Treasury has intervened in the foreign exchange market to support the Japanese yen, which has been battered by a decline in value. This marks Washington's first direct intervention in the yen market with Tokyo in over a decade.
The Treasury purchased yen on Friday, with the exact amount not specified. The move came after Japan's Finance Ministry informed several banks that it might intervene in the yen market and asked them to 'stand ready for future action.'
A note taken by US Secretary of the Treasury Scott Bessent during a cabinet meeting at Camp David showed 'To Do' followed by 'Buy Japanese Yen (JPY) $5-10 bil.' This suggests that the Treasury may have been considering purchasing yen on a large scale.
The news of potential intervention helped boost the yen, with its value increasing against the US dollar. The dollar dropped to around 157.6 yen in late afternoon trading, down from nearly 164 yen earlier in the day.