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U.S. Treasury steps in to buy yen as Japan currency hits lows
The Treasury bought yen on Friday after warning banks to stand ready, while the dollar fell to about 157.6 yen from about 158.9 yen earlier in the day, according to LSEG data.
The U.S. Treasury bought yen on Friday to support the battered Japanese currency, the Financial Times reported, marking Washington's first yen buying intervention with Tokyo in more than a decade as the yen lingers near 40 year lows. According to the FT, the Federal Reserve Bank of New York sold euros for yen on behalf of the Treasury through Goldman Sachs and Morgan Stanley, though the report did not specify the amount of yen purchased. Earlier that day, the Treasury told a number of banks it might intervene and asked them to "stand ready for future action," Reuters reported. Japan and the United States may unveil a policy as early as next week to address the yen's weakness, Kyodo News reported, citing informed sources. The report said such an announcement would act as a warning against speculative bets that have pressured the yen, with the aim of stabilizing markets. News of the potential Treasury intervention helped lift the yen, with the dollar dropping to about 157.6 yen just before 5 p.m. EDT from about 158.9 yen around 4:14 p.m., LSEG data showed. Over recent weeks, the dollar had risen to nearly 164 yen, its highest since 1986, while Japan may have sold as much as $58.97 billion to buy yen on Thursday, central bank data indicated on Friday.