The U.S. Treasury purchased Japanese yen to stabilize the currency as it nears 40-year lows.
The U.S. Treasury purchased Japanese yen on Friday, marking the first direct intervention in the currency market over a decade. The Federal Reserve Bank of New York executed the purchase on behalf of the Treasury through Goldman Sachs and Morgan Stanley to support the battered currency. This move follows a period where the yen reached nearly 164 yen per dollar, its highest level since 1986. The Treasury informed banks to stand ready for future action, while a notepad belonging to Treasury Secretary Scott Bessent showed a goal to buy $5-10 billion in yen. Japan has also been actively intervening to stem the yen's weakness, selling as much as $58.97 billion to buy yen on Thursday alone. To soothe market worries regarding its own firepower, Japan's Finance Ministry stated that monetary authorities have a broad range of tools to address liquidity needs. The intervention helped boost the yen, which saw a notable jump during late afternoon trading on Friday.