US Treasury Pours Billions into Yen Market for Second Day

The Japanese Yen has seen significant intervention by the US Treasury, but at an unprecedented cost. The USD/JPY pair dropped to just under 158.00 on Friday, a full yen and a half below its opening price. This is the second round of intervention in three days, with the first occurring on Thursday when Tokyo spent a record sum to break the book.

The pattern suggests an operation rather than a market-driven move. The London morning saw a sudden drop to 158.50, followed by a rebound and another lurch around 13:15 GMT when the Treasury headline crossed. Desks struggled to distinguish between an operation and liquidation.

According to IMF guidelines, three consecutive days of intervention count as a single episode. With two windows remaining before November, Tokyo can now hold the level with a fraction of the money or none at all, as every air pocket is deniable. Traders must price in the possibility rather than fact.