A memo by Treasury Secretary Scott Bessent. [Reuters]
A memo by Treasury Secretary Scott Bessent. [Reuters]

"To do" — "Japan yen (JPY) $5 billion–$10 billion."

Those are the contents of a memo belonging to Treasury Secretary Scott Bessent, photographed at a US federal cabinet meeting held at Camp David in Maryland.

Reuters reported Friday that a memo photographed at the Camp David cabinet meeting showed signs that the US Treasury had intervened to halt the weakening of the Japanese yen. The photo was taken at 11:33 a.m. Eastern Time.

Reuters sought comment from a Treasury Department spokesperson on the intervention but did not receive an immediate response.

About two hours before the photo was taken, Reuters cited anonymous sources as saying the Treasury had notified several banks that it might intervene in the yen market on Friday, according to Yonhap.

Japanese authorities said they intervened in the Tokyo foreign exchange market on Friday Japan time to halt the yen's slide, with the Japanese currency posting significant gains during Eastern Time morning trading hours as a result.

Reuters also said the yen strengthened considerably against the dollar again during late afternoon Eastern Time on Friday.

According to London Stock Exchange Group data cited by Reuters, the dollar fell roughly 0.8 percent in about 40 minutes — from around 158.9 yen at 4:14 p.m. Eastern Time to around 157.6 yen just before 5 p.m.

The Treasury had said it was considering intervening with several Wall Street banks in recent months to support the yen's value.

The yen fell to its lowest level against the dollar since 1986 on Aug. 23, when the exchange rate hit 163.83 yen per dollar.

According to the Financial Times, it is the first time since 1998 that Japan and the United States have cooperated to support the yen through direct purchases of the currency. At that time, the US Treasury bought yen to strengthen the Japanese economy after the currency fell to an eight-year low.

Meanwhile, the Nikkei reported Friday that the sharp drop in the dollar-yen exchange rate in the New York foreign exchange market on Thursday — with the yen strengthening to as low as 157.80 yen per dollar at one point during the session — was caused by the Japanese government and the Bank of Japan buying yen and selling dollars. The yen fell more than 2 percent in about 50 minutes from around 162.80 yen per dollar after 10:30 p.m. Thursday, before recovering to around 159.54 yen per dollar as of 6 a.m. Friday.

The Nikkei said that at the same time Japan moved to buy yen and sell dollars, the United States conducted a "rate check" — a preliminary step before market intervention in which authorities query major banks about foreign exchange conditions. Markets typically regard a rate check as a precursor to actual intervention in the currency market.


cook@heraldcorp.com