US Treasury Joins Japan in $96 Billion Yen Rescue, Threatens Global Financial Markets
Washington's coordinated effort with Japan to support the yen has sent shockwaves through financial markets. On July 31, Tokyo and Washington intervened in the foreign exchange market, purchasing yen worth nearly $96 billion over two days.
This move marked the United States' first joint intervention with Japan since 1998 and its first foreign-exchange intervention since 2011. The operation aimed to counter months of 'excessive volatility and disorderly movements' in the yen's value.
According to Reuters, the Bank of Japan may have spent $58.97 billion during an initial intervention last Thursday and another $36.58 billion during last Friday's coordinated operation with the United States.
US Treasury Secretary Scott Bessent stated that 'Treasury remains attentive and in close communication with our counterparts at MOF and BOJ. We will not hesitate to participate in further joint intervention.' Japanese Finance Minister Satsuki Katayama echoed this sentiment, saying their governments remained prepared to intervene again.
The impact of the yen's rise on Bitcoin is a concern for traders. Data from CryptoSlate showed that BTC fell to as low as $62,382 during the last 24 hours before touching a high of $64,163. However, it later pared back its gains and was trading around $63,510 as of press time.
James Thorne, chief market strategist at Wellington-Altus Private Wealth, noted that if Tokyo must defend the yen, the Ministry of Finance may need to sell US Treasuries, potentially lowering bond prices and pushing US yields higher. This could create a broader threat to financial markets.