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US and Japan yen intervention raises focus on dollar liquidity
The first joint yen support in 28 years followed a move to steady the yen near 40-year lows, while officials pointed to expanding the Fed-backed FIMA repo backstop.
Cointelegraph reports that the United States and Japan carried out their first joint yen intervention in 28 years, stepping in as record bond yields and concerns around the yen carry trade raised worries about liquidity conditions.
The yen had fallen to roughly 164 per dollar, and the US Treasury used the Exchange Stabilization Fund to sell euros via the New York Fed, rather than selling dollars directly.
Cointelegraph also notes that US Treasury Secretary Scott Bessent highlighted coordination with the Bank of Japan ahead of the G20 meeting in late August, and referenced Japan’s access to the Fed’s Foreign and International Monetary Authorities repo facility, known as FIMA, which can provide dollar liquidity without selling US Treasuries.
The article says the BoJ’s large Treasuries holdings could affect yields, and it adds that Bessent called for the FIMA repo facility to be upsized in coming months, with potential implications for US borrowing costs and broader risk asset and Bitcoin liquidity.
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