US Treasury Joins Japan's Yen Rescue Effort
The United States joined Japan in a coordinated effort to support the yen after Tokyo's currency declined to a 40-year low. The operation, which took place on July 31 and August 1, involved the US Treasury purchasing yen alongside Japan's Ministry of Finance. This marked Washington's first foreign-exchange intervention since 2011.
The $96 billion intervention lifted the yen from a low near 164 per dollar to 155.20 by Monday, but it gave back some gains on Tuesday and was trading at about 157.8 as of press time. US Treasury Secretary Scott Bessent said that Washington remains prepared to intervene again.
The decision to support the yen reflected the wider financial risks created by Japan's currency decline. Tokyo holds $1.14 trillion in US government securities, making it the largest foreign holder of Treasuries. If further intervention requires large Treasury disposals, it could lower bond prices and push US yields higher.