The Federal Reserve (Fed) revealed that the United States utilized US Treasury Department funds when joining Japan in an operation to support the yen late last July.
The Fed clarified that its own central bank funds were not used in the operation.
New York Fed Acts as Treasury Agent
According to the minutes of the Federal Open Market Committee (FOMC) meeting, the Federal Reserve Bank of New York acted as the fiscal agent for the US Treasury in the operation.
The funds used came from the Treasury, while the Fed's own portfolio holdings were not involved.
Intervention Amount Not Disclosed
However, the meeting minutes did not disclose when the operation took place or the exact amount of funds used.
US Treasury Secretary Scott Bessent had previously stated that the amount used by the United States was small and that the action was taken in the US interest.
Yen Under Pressure, Import Costs Rise
The weak yen has become an increasing concern for Japanese authorities, as the currency's depreciation drives up the prices of imported goods and household living costs.
President Donald Trump has also criticized the weak yen, arguing that the situation gives Japanese manufacturers a trade advantage.
First Intervention in Nearly 30 Years
The operation in late July marked the first joint intervention by Tokyo and Washington to support the yen in nearly three decades.
Japan took action after the yen fell to its lowest level against the US dollar since the 1980s.
Japan Spends Nearly US$100 Billion
Data from Japan's Ministry of Finance shows that the country spent a record ¥15.4 trillion—or approximately US$97.5 billion—on market intervention during the one-month period ending August 26. Japanese and US officials have also signaled that fresh intervention could be undertaken if necessary.
Yen Remains Under Pressure
However, market intervention may not necessarily alter the yen's long-term trend.
The yen remains under pressure as the Bank of Japan is perceived to be lagging behind the Federal Reserve's monetary policy, alongside concerns regarding Japan's fiscal position. On Wednesday, the yen traded around 157.95 against the US dollar.
