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U.S. Treasury tells banks it may intervene in yen on Friday
The notice was relayed through the New York Fed after Japan supported the yen Thursday, setting up the biggest weekly gain since February.
The U.S. Treasury has informed several banks that it may intervene in the Japanese yen market on Friday and asked them to "stand ready for future action," according to a source familiar with the matter speaking to Reuters. The message was channeled through the Federal Reserve Bank of New York.
The development comes a day after Japanese authorities moved to prop up the yen, which helped position the currency for its biggest weekly rise since February and pulled it off four-decade lows against the dollar. After the report of potential U.S. action, the yen pushed higher, last trading at 159.09 per dollar.
Reuters also reported that the specific method for any potential Treasury intervention was not immediately clear. A Reuters quote from currency strategist Lee Hardman at MUFG said the notice aligns with market expectations that the New York Fed has been carrying out so-called rate checks, which can precede intervention, and that it adds to market participants' nervousness.
U.S. Treasury Secretary Bessent said on social media that the Treasury maintains a strong relationship and close coordination with Japanese authorities, without confirming intervention preparations. Japanese currency diplomat Atsushi Mimura declined to comment on intervention but suggested the United States could be involved, including through requests to dealers for indicative dollar-yen quotes considered a precursor to action.