US Treasury Warns of Potential Yen Intervention

The US Treasury has issued a warning to several large banks that it may intervene in the foreign currency market if volatility in the Japanese yen continues. This move follows Japan's efforts to prop up its currency, which has been under pressure due to the reduced interest rate differential between the two countries.

According to reports, the Treasury is considering buying Japanese yen using its foreign currency reserves through the Federal Reserve Bank of New York. The warning reflects growing concern among Washington policymakers about excessive volatility in exchange rates.

The yen gained against the US dollar on rumors of anticipated US intervention, with investors readjusting their expectations for future monetary policy in Japan. Analysts believe that a coordinated action by Washington and Tokyo is more believable than a solo intervention, showing policy cooperation.