The US Treasury intervened on August 1 in the foreign exchange market to buy Japanese yen, marking the first coordinated US-Japan currency intervention in roughly 30 years. The Trump administration sold euros to finance these purchases, with planned amounts estimated between $5 billion and $10 billion. The intervention occurred as the yen had fallen to its weakest level against the dollar since 1986, approaching 40-year lows. Japan had already been selling US Treasuries to fund its own yen-support operations, giving Washington significant leverage. Since the yen has historically been one of the most important funding mechanisms for speculative positions across markets, including crypto, this intervention could trigger an unwind of those positions.
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