U.S. Treasury Notifies Banks It May Intervene in Japanese Yen Market
The U.S. Treasury has informed several banks that it may intervene in the Japanese yen market, according to a source familiar with the matter. This notice was relayed through the Federal Reserve Bank of New York and follows recent actions by Japan's authorities to support its currency. The yen rose sharply on Friday after news emerged about potential intervention from U.S. officials. The Treasury has not disclosed how it might intervene, but market analysts suggest that rate checks—requests for indicative dollar/yen quotes—are a possible precursor to action. Japanese top currency diplomat Atsushi Mimura hinted at U.S. involvement in efforts to stabilize the yen and noted that American support goes beyond psychological reassurance. U.S. Treasury Secretary Scott Bessent has expressed concerns about excessive volatility in the yen, calling it undervalued and harmful to economic stability. The last direct intervention by the U.S. in Japan's currency was in 2011 during a G7-coordinated effort following natural disasters.
Topics: currency intervention Federal Reserve Japan U.S. Treasury yen