US Treasury Steps In to Support Yen as Japan Seeks to Stem Currency's Slide

The US Treasury has intervened in the currency market to support the battered yen, marking its first direct action since 2011. The move comes as Japan's currency languishes near 40-year lows. According to a report by the Financial Times, the Federal Reserve Bank of New York conducted a sale of euros to buy yen on behalf of the Treasury through Goldman Sachs and Morgan Stanley.

The reported intervention would be the first time since 2011 that Washington has coordinated with Tokyo to stabilize markets after Japan's earthquake and tsunami disaster. The US Treasury had informed banks earlier this week that they should 'stand ready for future action' in relation to the yen market.

A photo of US Treasury Secretary Scott Bessent's notepad during a cabinet meeting at Camp David in Maryland showed that he was contemplating purchases of $5 billion to $10 billion worth of Japanese yen. The news helped push the yen higher against the dollar on Friday, with a notable jump during late afternoon trading.