Overview
- Japan and the United States confirmed on Monday that they coordinated a joint operation to buy yen after the currency fell to its weakest level in about 40 years.
- Reports say the New York Fed sold euros and bought yen on behalf of the U.S. Treasury while Japan tapped the Fed’s FIMA repo facility to obtain short‑term dollars to fund its purchases; the FIMA tool lets foreign holders of U.S. Treasuries borrow dollars without selling bonds.
- Analysts estimate the intervention ran to several trillion yen with published ranges around roughly 6 to 8.45 trillion yen and Bank of Japan data suggesting Tokyo sold nearly $59 billion of dollars in a prior round.
- Markets saw a sharp yen rebound after the action, and officials warned the move could affect exporters, lower import‑fuelled inflation pressure in Japan, and push up U.S. Treasury yields if Japan were forced to sell bonds to raise dollars.
- Authorities said coordination between Tokyo and Washington remains active and that further joint steps are possible, while some U.S. officials have proposed expanding the FIMA facility to reduce pressure on global bond markets.