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Yen defends near 159 as Treasury signals readiness to act again

USD/JPY slid in multiple “lurches” through the day, with the New York Fed telling banks the Treasury may enter the market.

Reported · Written up by our desk · Major Pairs

Japanese officials’ latest efforts to support the yen held USD/JPY just under 159.00 late in the session, according to FXStreet. The dollar had been sold in three separate moves since Tokyo trading, and no single market participant was publicly linked to those lurches.

FXStreet said the trading pattern looked more like an operation than a normal market flow, with the London morning bringing USD/JPY down toward 158.50 before it was bought back, and another drop around 13:15 GMT that later led to a New York session low near 158.00.

The outlet also pointed to communications from the US Treasury. Through the New York Fed acting as Treasury’s fiscal agent, a number of banks were told the Treasury may enter the market and should stand ready for further action.

FXStreet added that Japan can likely sustain intervention without depleting reserves, noting Japan holds about $1.4 trillion in reserves, roughly $1.2 trillion in foreign currency assets, and that an April to May campaign used about $74 billion without denting the stock. The article said the binding constraint is authorization, with one remaining window before November once the earlier campaign is counted, and that Federal Reserve participation would require separate FOMC authorization that has not been granted.

Latest closeUSD/JPY 159.74 ▼2.5%

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