US Treasury bought yen in Q3 to curb sharp depreciation, New York Fed report reveals
The New York Federal Reserve Bank reported that the US Treasury bought ¥79.4bn in the spot market on July 31 to counter the yen's sharp fall, acting as the government's fiscal agent. The intervention, coordinated with Japan's Ministry of Finance, saw the dollar-yen rate drop from about ¥163 to ¥155
The New York Federal Reserve Bank said the US Treasury bought Japanese yen in the third quarter, although the Fed itself did not intervene in the foreign-exchange market during the period.
In its quarterly report on money-market operations, the New York Fed disclosed that it had carried out foreign-exchange intervention on behalf of the Treasury during the quarter to curb the yen's sharp depreciation. The report stated that the New York Fed had requested quotes for the dollar-yen rate on behalf of the Treasury, but only as the government's fiscal agent.
On July 31, the New York Fed bought ¥79.4bn in the spot market, equivalent to about US$497m, using funds from the sale of euros held in the Exchange Stabilisation Fund, the report said. It added that Japan's Ministry of Finance also took coordinated action, intervening with ¥15.4tn during the quarter to address excessive volatility and disorderly moves in the yen.
The report noted that between July 30 and August 3, the dollar-yen rate fell from about ¥163 to about ¥155. However, the yen later weakened again, approaching the 160 level.