US Treasury and Japan’s Ministry of Finance cooperate to defend JPY
The US Treasury and Japan’s Ministry of Finance have taken coordinated action to defend the Japanese Yen. This cooperation aims to support Japan’s currency and protect US Treasury borrowing costs.
The Japanese Finance Minister recently commented on Japan’s intention to use the Fed’s FIMA facility to defend the Yen, avoiding the need to sell Treasuries. This move may signal a shift away from the post Bretton Woods free-floating Dollar-centric regime.
The US Treasury’s support for Japan’s efforts to defend its currency may also relieve competitive pressure on US manufacturers and pull Japan closer into the US’ strategic orbit.