Yen: US and Japan intervened to support it, FT reports

The Financial Times reported that Washington and Tokyo jointly intervened to support the Japanese yen after it fell to 163.24 per dollar in July, its weakest level since 1986.

The newspaper, citing people familiar with the matter, said the Federal Reserve Bank of New York sold euros to buy yen on behalf of the US Treasury on July 31, with the trades carried out through Goldman Sachs and Morgan Stanley. It said the move would be the first coordinated US-Japan effort to support the yen since 1998.

The yen was trading at 160.53 per dollar on July 31 after reaching 158 a day earlier. Stephen Innes of SPI Asset Management wrote that whether Tokyo was involved remained unclear, though the price move resembled earlier intervention patterns.

Analysts cited by the Financial Times estimated Japan's possible intervention at about 8.45 trillion yen, or $52.8 billion. The Nikkei business daily put the amount at between 6 trillion and 7 trillion yen.

The yen has been under pressure from higher US interest rates, rising oil prices and capital outflows. The interest-rate gap has encouraged yen-funded carry trades, in which investors borrow cheaply in yen and buy higher-returning assets elsewhere.