U.S. Treasury buys yen in rare intervention after Bessent note outlined $5 billion-$10 billion purchase

The U.S. Treasury bought Japanese yen around Aug. 1 in a rare foreign-exchange intervention executed through the Federal Reserve Bank of New York, after Treasury Secretary Scott Bessent’s July 31 meeting agenda showed a plan to purchase $5 billion to $10 billion of the currency. Goldman Sachs and Morgan Stanley facilitated the transaction, which was aimed at supporting the weakened yen. The move appears to confirm what had previously been only a proposed or possible operation. It would mark the first such U.S. yen-buying intervention in roughly 15 years, since 2011, but unlike that Group of Seven episode after the Great East Japan Earthquake, this action was described as a unilateral U.S. purchase of yen. JPMorgan said the intervention faces a structural constraint because the Treasury’s foreign-exchange reserves are finite. Unlike monetary policy, where the Federal Reserve can expand its balance sheet, Treasury intervention draws on a fixed pool of resources, meaning repeated yen purchases would reduce its capacity for future operations unless it resorted to what JPMorgan called extraordinary measures. The size of the operation is meaningful for market positioning but small relative to the roughly $7.5 trillion in daily global foreign-exchange turnover. That may limit its deterrent effect if traders conclude the Treasury can only sustain one or two rounds of intervention. The development follows earlier Japanese efforts to slow the yen’s decline, including a roughly yen 5.5 trillion intervention episode in 2024, or about $35 billion to $36 billion, and additional interventions totaling tens of billions of dollars in 2026.