US Treasury Sells Euros to Boost Yen in Rare Coordinated Intervention

The US Treasury Department has made an unusual move in currency markets by selling euros to buy yen. This joint intervention with Japan's Ministry of Finance on Friday aims to prop up the weak yen, which has fallen to historic lows.

According to analysts at HSBC, this is a 'highly unusual, maybe unprecedented, step' by the US Treasury. They believe it reflects a desire to help Japan strengthen its currency without signaling a broader weakness in the dollar.

Japan's Ministry of Finance confirmed on Monday that it had carried out yen-buying intervention on Friday with the US Treasury Department. However, rather than buying yen and selling dollars, the Financial Times reported that the US Treasury bought yen for euros instead.

The euro has fallen from a high of 187.4 yen on Thursday to dip below 180 on Monday, an over 4% move. Moves in one currency pair can have instant effects across the market, causing banks and traders to reprice their expectations.