While the BOJ understandably refuses to admit it spent a record $140BN (across all markets, $90BN on EBS) to briefly manipulate the Japanese yen higher...
... ahead of yet another disappointing (non-rate hike) decision (according to some calculations, Japan's central bank is about 100 bps of rate hikes behind to stop the ongoing collapse of the yen), others are less shy.
According to Reuters, similar to the last failed intervention by Japan and citing "a source familiar with the matter", the US Treasury informed a number of banks that it may intervene in the Japanese yen market on Friday and that they should "stand ready for future action."
The notice to banks, channeled through the Federal Reserve Bank of New York, comes a day after Japanese authorities stepped in to prop up the yen, setting the currency up for its biggest weekly rise since February, pulling it off of four-decade lows against the dollar (although the yen has since erased much of its gains).
News of the potential intervention by the U.S. Treasury helped push the yen higher against the dollar on Friday. It last traded at 159.22 to the dollar after trading as low 163.65 on Thursday. As shown below, the past 48 hours have seen no less than 5 distinct intervention attempts by the BOJ and/or the US Treasury to push the yen higher.
