US Treasury intervenes in yen market for first time in history
US Treasury undertakes historic intervention in yen market
The US Treasury has launched an unprecedented intervention in the yen market, marking the first such move by the US government. The intervention aims to address the yen's rapid depreciation, which has raised concerns about global economic stability. This historic action underscores the growing tensions in currency markets and the US's willingness to act unilaterally to influence exchange rates.
The US Treasury has undertaken a historic intervention in the yen market, marking the first time the US has directly intervened to support the Japanese currency.
- eigenspace
Japan holds a huge amount of US treasuries, and I guess was considering a mass sell off to raise cash to defend the Yen.
US treasury bond yields are already dangerously high for the US and Japan selling treasuries would push yields up even higher, and could trigger more panic selling from others.
I guess this is Bessent's scheme to try and kick that can down the road.
- dredmorbius
Historic, yes. Unprecedented, no.
The Treasury’s intervention to bolster the yen is the first since 1998, when it bought the currency in order to strengthen Japan’s economy after the yen had dropped to eight-year lows. The US intervened in Japan’s currency in 2011 to weaken it as part of a co-ordinated international effort to prevent a dangerous currency appreciation after the Tohoku earthquake and tsunami.
(From TFA.)
The Asian Financial Crisis of the 1990s was one of several that occurred during that decade (also: the recession triggered by the 1st Gulf War 1992, the Mexican Peso crisis of 1994, the Russian financial crisis of 1998, and arguably the post-dot-com bust in 2001, stretching the decade just a tad). For those present at the time, the dot-com boom was a short-lived (though extravagent) interval, beginning in late 1998, spiking early 2000, and crashing out in early 2001.
- CamelCaseName
Wait, no way!
Someone posted a zoomed up photo of a US official (can't recall who) of a notepad a few days ago saying "To do: Buy Yen 5Y - 10Y" or something similar
- rib3ye
- heisenbit
Propping up the yen may be more helpful for the US than if Japan hikes interest rates which is on the table (Google ’bring money home‘). The carry trade buying treasuries with debts incurred in yen has been a steady source for US funding. Eventually it will happen with collateral impact on treasury rates but this ‚supportive‘ move may just shift it past November.
- dzonga
Japan is the sort of canary in the coal mine.
so yeah if the yen pops - then the u.s will too given all the 'a.i' shenanigans & the market manipulation with oil.
but I guess the US Treasurer is willing to manipulate the market till they can't.
- bilsbie
Can anyone steel man the “this isn’t a big deal” side of this?
On x and reddit all I see are sky is falling posts.
- raincole
Japan's industries have been squeezed hard by China's rare earth sanction and global energy price. I'm not sure some financial operations can wiggle them out of the situation.