JP Morgan estimates US intervention capacity at $187 billion but warns congressional approval may limit sustained action.
JP Morgan analysts caution that the US Treasury’s ability to support yen intervention is significantly constrained without extraordinary measures. The Exchange Stabilization Fund holds €13 billion in euro assets and $25.5 billion in other reserves, far below Japan’s capacity for unilateral action.
Recent joint statements from US and Japanese officials had bolstered confidence in coordinated efforts, but JP Morgan suggests markets may now focus on Japan’s own resources. Unconventional steps, including Federal Reserve involvement, could theoretically double US firepower to $187 billion, though congressional funding remains a hurdle.
Traders are likely to treat US participation as secondary, prioritizing the Bank of Japan’s policy path and Japan’s intervention capacity as primary drivers for the yen’s stability.