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U.S. Treasury Boosts Yen
The U.S. Treasury Department and Japan's Ministry of Finance confirmed their cooperation in direct intervention to support the yen, aimed at countering the Japanese currency's weakness, which has approached its lowest levels in nearly 40 years. Washington informed domestic banks that it may intervene in the yen market with investments ranging from $5 to $10 billion, marking an unprecedented move since 2011 through yen purchases coordinated with Tokyo. Additionally, Japan and the United States are moving toward announcing a joint policy next week to contain speculative bets against the yen, with the goal of stabilizing the financial markets and addressing pressures caused by currency fluctuations. Japanese interventions in the market have continued during recent stock movements, with indications that Tokyo possesses various tools to support the currency, including the use of the repurchase agreement (repo) mechanism, which allows increasing dollar liquidity without directly selling U.S. Treasury bonds.
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