US Treasury Warns of Possible Yen Intervention Amid Volatility

The US Treasury has informed banks of a possible intervention in Japan's yen market, citing potential volatility and undervaluation. This move comes after Japanese authorities stepped in to prop up the yen on Thursday.

The notice was sent through the Federal Reserve Bank of New York, stating that the Treasury may intervene in the yen market on Friday and that banks should be prepared for future action.

This potential intervention has already had an impact on the currency, with the yen rising against the dollar. It last traded at 159.09 to the dollar after reaching a low of 163.65 on Thursday.

Japan's top currency diplomat, Atsushi Mimura, declined to comment on the specifics but hinted that US involvement in stabilizing the yen was more than just psychological support.