Washington's $5-10 Billion Yen Buying Order Confirmed by Camp David Notepad

A photograph of Scott Bessent's notepad at President Trump's Camp David cabinet meeting on July 31 has confirmed that Washington supported a yen buying order. The note instructed Treasury to buy $5 billion to $10 billion of Japanese yen, according to the Reuters photo.

The move was significant because the U.S. rarely intervenes in the yen market. Japan also intervened, with estimates suggesting its efforts were worth around ¥8.45 trillion ($52.8 billion), one of the largest single-day efforts to support its currency. Atsushi Mimura, Japan's top currency official, said that Japan's efforts had substantial support from Washington.

The combined force of both countries' intervention was enough to strengthen the yen, with the dollar-yen rate pushing toward levels not seen since 1986. The rate gap between the Bank of Japan and the Federal Reserve is behind the carry trade, where investors borrow cheaply in yen and buy higher-yielding dollar assets.

However, the yen didn't fall by accident. The Bank of Japan has kept its policy rate at 1% under Governor Kazuo Ueda, while the Federal Reserve's rate has sat much higher. This gap is still fueling the carry trade, which could lead to further selling pressure on the yen.