The United States sold euros rather than dollars to buy yen during last weekend’s coordinated intervention, an unprecedented move designed to avoid the appearance of deliberately weakening its own currency, after Tokyo and Washington confirmed their first joint yen-support operation in nearly three decades.
The New York Federal Reserve executed the euro sales on behalf of the U.S. Treasury, which maintained that no coordination with foreign authorities was required for decisions on reserve allocation within the Exchange Stabilization Fund. The European Central Bank learned of the operation only after it had been carried out, prompting ECB President Christine Lagarde to speak with Treasury Secretary Scott Bessent on Saturday.
The yen, which had slumped near ¥164 to the dollar earlier in the month — its weakest level since 1986, strengthened to around ¥157 following the intervention. Japan may have spent approximately ¥13.8 trillion over two days to support the currency. In London on Thursday, the euro rose against the dollar to around $1.1550–60, while a weaker-than-expected U.S. July jobs report added to dollar pressure.