The U.S. Treasury is reported to have intervened in the yen currency market to support the Japanese yen, according to a Financial Times report cited by multiple outlets. The reports say the intervention takes the form of outright purchases of yen. The Federal Reserve Bank of New York carries out the transaction on the Treasury’s behalf, according to the accounts.
Specifically, the Fed New York is reported to sell euros and use the proceeds to buy yen. One report adds that the trades are conducted through counterparties including Goldman Sachs and Morgan Stanley. The articles frame the move as occurring after Japan takes steps in the currency market, though they do not provide details of Japan’s actions.
The sources agree on the key elements of the U.S. operation: the U.S. Treasury’s involvement, yen purchases as the method of support, and the Fed New York’s role in executing the trades, including selling euros to fund the yen buying.
