Joint US-Japan action to support the yen at 164 per dollar marks first such move since 1998, signaling potential dollar liquidity shifts.
The US and Japan conducted a rare joint currency intervention last week to bolster the yen, which hit a 40-year low of 164 per USD. This was the first coordinated effort since 1998, involving the sale of euros from the US Treasury’s Exchange Stabilization Fund rather than dollars.
The move reflects growing coordination between Washington and the Bank of Japan, with US Treasury Secretary Scott Bessent emphasizing collaboration ahead of the G20 finance ministers’ meeting. Japan’s access to the Federal Reserve’s FIMA repo facility could mitigate dollar liquidity strains, though accelerated Treasury sales by Japan may pressure yields.
Analysts warn the yen carry trade unwind could tighten liquidity further, impacting Bitcoin and broader risk assets amid shifting dollar dynamics.