US Treasury intervenes to support yen after Japan steps in: Financial Times

A notepad in front of US Treasury Secretary Scott Bessent reads "To Do Buy Japanese Yen $5-10 bil" as he participates in a Cabinet meeting on July 31.

NEW YORK – The United States Treasury bought yen on July 31 to support the battered Japanese currency, the Financial Times (FT) reported, marking Washington’s first intervention along with Tokyo to support Japan’s currency in more than a decade as it languishes near 40-year lows.

The Federal Reserve Bank of New York conducted a sale of euros to buy yen on behalf of the Treasury through Goldman Sachs and Morgan Stanley, the FT said, citing people familiar with the matter.

Earlier on July 31, the US Treasury informed a number of banks that it might intervene in the yen market and that they should “stand ready for future action”, a source familiar with the matter told Reuters.

A Reuters photo of US Treasury Secretary Scott Bessent’s notepad during a Cabinet meeting at Camp David in Maryland showed the words: “To Do” followed by “Buy Japanese Yen (JPY) $5-10 bil”.

The Treasury did not immediately respond to requests for comment on the FT report and the Bessent notepad photo.

The New York Fed and Morgan Stanley also did not immediately respond to request for comment outside regular business hours.

The US last directly supported the yen in 2011, coordinating with fellow Group of Seven nations to stabilise markets after Japan’s earthquake and tsunami disaster.

News of the potential intervention by the Treasury helped boost the yen, with a notable jump during late afternoon trading.

Data from LSEG showed that the US dollar dropped to about 157.6 yen just before 5pm EDT (5am on Aug 1, Singapore time) from about 158.9 yen around 4.14pm EDT.

The US currency had risen in recent weeks to nearly 164 yen, its highest since 1986.

Japan may have sold as much as US$58.97 billion to buy yen on July 30, central bank data indicated on July 31, signalling repeated efforts to stem the yen’s weakness.