US Treasury Bought 79.4B Yen in July, First Yen Intervention Since 1998
The Federal Reserve Bank of New York disclosed on Nov. 12 that the US Treasury bought 79.4B yen, worth $497.37M, in the spot market on July 31, selling euros from the Exchange Stabilization Fund. It was the first US yen-buying intervention since 1998.
The New York Fed executed the trade as fiscal agent for the Treasury, not as a monetary policy decision. The Fed didn't intervene for its own account during the July to September quarter.
Japan's Ministry of Finance did the heavy lifting, intervening with 15.4T yen over the same quarter, or $96.5B. Its July 30 operation alone set a single-day record of 7.98T yen, about $50.4B. The currency had sunk to 163.99 per dollar in late July, a four-decade low.
Rate checks came first, on July 30, when the New York Fed sought indicative dollar-yen quotes solely on Treasury instructions. The yen rose 2.3% that day. The purchase followed on July 31, and by Aug. 3 the dollar-yen rate had fallen from around 164 to around 155.
Japan Outspent Washington Nearly 200 Times on Yen Buying
Yen purchased in the July to September 2026 quarter, billions of yen
Bar chart. Billions of yen. Japan Ministry of Finance: Billions of yen 15K. US Treasury: Billions of yen 79.40. Federal Reserve: Billions of yen 0.
Source: New York Fed quarterly report on foreign exchange operations, Nov. 12, 2026, Japan Ministry of Finance; Reuters
The US ticket was far smaller than signaled
Treasury Secretary Scott Bessent had hinted at the time that US participation could reach $10B, far above what the records now show.
Analysts say the modest American ticket may leave traders more willing to test higher levels.
The yen weakened past 160 per dollar overnight, its first break of that line since early September. Finance Minister Satsuki Katayama renewed warnings that Tokyo stands ready to act again.
The broader driver sits in Washington. The dollar's climb has tracked rising US Treasury yields and bets on a Fed rate hike next month.
Chart signals point to 160.39 as the next milestone, with a break above opening the path toward 164, said Gaitame.com Research Institute analyst Shuhei Uehara. Market players say the yen could retest 40-year lows.
Aozora Bank chief market strategist Akira Moroga expects Japan to act alone if needed, calling 160 a closely watched line.
Indonesia is fighting the same dollar
The rupiah fell as much as 0.5% to a record low of 18,241 per dollar on Nov. 12, past its previous record of 18,190 set in early June.
Bank Indonesia said it's intervening in spot markets, offshore and domestic non-deliverable forwards, and buying government bonds in the secondary market.
The currency has weakened more than 8% against the dollar in 2026, making it Asia's worst performer.
Adding to the strain, MSCI floated a proposal in October to reclassify Indonesia as a standalone market. Goldman Sachs Group estimated about $5.6B of passive outflows if Indonesian stocks leave MSCI's indexes.
Official buying can slow a slide, but neither operation has produced a reversal. Japan's record intervention and Bank Indonesia's spot sales and bond purchases bought time, and the yen is back above 160 while the rupiah sits at a record low.
