US Treasury moves to support yen; photo shows Bessent notepad listing $5-10bn yen purchase
How left and right are reading this
- Both agree
- Billions of public intervention moved through the New York Fed, dollar/yen back near 160 by Friday, and Japanese households still absorbing higher import and living costs.
- They split on
- Whether the story is about public money routed through two private banks with disclosure left to a photographer, or about Japan leaning on intervention instead of its own rate policy.
The Facts
- The US Treasury notified major banks on Friday, through the New York Fed, that it could conduct currency trades to support the yen and asked them to be ready for future action.
- The Financial Times reported the New York Fed sold euros and bought yen on the Treasury's behalf on Friday, with Goldman Sachs and Morgan Stanley executing the trades; banks had earlier been told to prepare executable yen-for-euro trades.
- Japanese authorities conducted a yen-buying, dollar-selling intervention during New York trading hours on Thursday, their first such operation in about three months.
- The intervention came after the yen fell to around four-decade lows against the dollar, near 164 yen, and lifted the currency more than 3% in a single session.
- Market sources described the operation as coordinated with South Korea, which sold dollars to support the won at around the same time.
- The Bank of Japan kept its policy rate unchanged at 1.0% on Friday, with one board member dissenting in favour of a hike; the yen weakened after the decision.
- A weak yen has raised the cost of imports and living costs in Japan, compounded by an energy price shock linked to the Iran war, which is the stated concern behind the intervention.
- The yen gave back part of its gains by Friday, with dollar/yen trading back around 160, leaving it unclear whether authorities had durably changed the currency's direction.
Context
What exactly did the photograph show?
The image, taken at 11.33am local time over Bessent's shoulder during the portion of a Camp David cabinet meeting open to journalists, showed a Camp David notepad with the underscored words "To Do" followed by "Buy Japanese Yen (JPY) $5-10 bil". Bessent's name card was visible on the conference table immediately above the notepad. A Treasury spokesperson did not immediately respond to a Reuters request for comment on the notepad's contents or on whether the Treasury had intervened Guardian.
Why would the United States buy yen?
Currency intervention by the US is uncommon; the Treasury holds part of its foreign-currency reserves in euros and would sell those to buy yen, with the New York Fed acting as its agent Investing.com,Investing.com. Bessent said on Thursday that Japan may have intervened and that the yen "seems very undervalued to me" Investing.com. Analysts framed US participation as raising the prospect of coordinated US-Japanese action rather than an isolated move by Tokyo Investing.com.
Who else is affected by a sharp yen move?
The yen is widely used as a funding currency, meaning investors borrow it cheaply to buy riskier assets; a sudden yen spike can force those positions to be unwound, spilling into equities, bonds and commodities Investing.com,Investing.com. Within Japan, a stronger yen squeezes exporters such as automakers and chip equipment firms while easing costs for domestically focused sectors Investing.com. Japanese exporters including Sony have credited the weak yen with boosting their recent earnings Free Malaysia Today,Investing.com.
Facts first. Then every angle.
The day’s biggest stories in one short brief — the facts everyone agrees on, then the competing values behind the headlines. Free in your inbox.
View all 103 sources
Wire services (10)
Independent coverage (50)
About these frames
See this differently than someone you know would? Two ways to keep it going.
The dial works on any URL — paste an article you read elsewhere this week.