--- title: The US Funded Its Yen Intervention by Selling Euros, Not Dollars description: The European Central Bank was told only after the trade had gone through, and the choice of currency kept the operation clear of the US Treasury market. author: Darie Nani (Editor-in-Chief) updated: 2026-08-09T15:15:04.112Z canonical: https://www.sovereignmagazine.com/article/us-sold-euros-yen-intervention-treasury image: https://cdn.nanimediahouse.com/us-treasury-yen-euro-intervention-129579.webp categories: Markets content_type: Analysis region: Global publication: Sovereign Magazine schema_type: Article --- The US Treasury and Japan's Ministry of Finance bought yen together on 31 July, and Washington paid for its side of the operation in euros. The Financial Times reported that the United States sold euros rather than dollars, and that it told the European Central Bank only after the trade had gone through. In a post on X on 7 August, the Financial Times wrote that "some senior ECB officials viewed the US's decision to use euros in its trade as an unprecedented breach of longstanding conventions on co-operation between western monetary authorities". ECB president Christine Lagarde and US Treasury Secretary Scott Bessent spoke on Saturday 1 August, the day after the trade. ## Tokyo Confirmed the Operation Three Days Later Japan's finance minister, Satsuki Katayama, set out what had happened on 3 August. "On Friday 31st, July (U.S. Eastern Time), Japan's Ministry of Finance purchased the Japanese yen in coordination with the U.S. Department of the Treasury," [she said](https://www.mof.go.jp/english/public_relations/statement/others/20260803073000.html). The action was taken pursuant to the US-Japan Finance Ministers' Joint Statement of September 2025, she said, and countered "excessive volatility and disorderly movements in the Japanese yen in recent months". Her statement does not say which currency the United States sold. It does commit Japan to more of the same, and it names a second mechanism: Japan "also plans to utilize the Federal Reserve's Foreign and International Monetary Authorities (FIMA) Repo Facility in the future". > "We will not hesitate to conduct further joint intervention." > — Satsuki Katayama, Minister of Finance, Japan ## Selling Euros Keeps the Operation Clear of the Treasury Market The Financial Times reported that Washington sold euros rather than dollars because it does not want interventions to lead to a sell-off of US Treasuries and higher US yields. The facility Katayama named points the same way. The Federal Reserve set up the FIMA repo facility in 2021 to lend dollars overnight to foreign official institutions "against their holdings of Treasury securities maintained in custody at the Federal Reserve Bank of New York", initially at 25 basis points and up to $60 billion per counterparty. It exists so that a central bank short of dollars can pledge its Treasuries instead of selling them. Nothing has been drawn on it. In the Federal Reserve's weekly balance sheet through Wednesday 5 August, the repurchase agreements line for foreign official accounts reads zero. ## Japan Sold Dollars in Every Intervention This Year Japan has been in this market alone for months. Ministry of Finance figures published on 7 August record ¥11.7 trillion of intervention across the April to June quarter, in three operations on 30 April, 4 May and 6 May. Each is logged the same way: the US dollar sold, the Japanese yen bought. The ministry's monthly release, published on 31 July, covers 29 June to 29 July and records zero. The joint operation falls just outside that window and is due in the next monthly figures. ## The September Agreement Is Between Washington and Tokyo Alone The joint statement Katayama cites was issued on 11 September 2025. In it the US Treasury and Japan's Ministry of Finance agreed to continue "close consultations on macroeconomic and foreign exchange matters", concurred that intervention "should be reserved for combatting excess volatility and disorderly movements in exchange rates", and committed to "public disclosure of: any foreign exchange intervention operations on at least a monthly basis". [The document](https://home.treasury.gov/news/press-releases/sb0245) runs between those two governments. It sets no expectation about telling a third central bank before selling its currency. ## The Yen Has Given Back Part of Its Gain Bank of Japan figures show the dollar buying 163.73 yen at the Tokyo close on 30 July. By 3 August, the day of Katayama's statement, it bought 156.76 yen, and the day's range reached 155.20. By 7 August it was back at 158.40. The Financial Times reported that the operation followed the yen's fall to a 40-year low, and that Bessent said on 3 August the United States was ready to act again. ## FAQ **Q: What is the FIMA repo facility?** A Federal Reserve facility, set up in 2021, that lets foreign central banks and official institutions borrow dollars overnight against Treasury securities they hold in custody at the Federal Reserve Bank of New York, rather than selling those bonds. The rate was set initially at 25 basis points, with a limit of $60 billion per counterparty. Japan's finance ministry says it plans to use it. **Q: Had Japan intervened on its own before this?** Yes. Ministry of Finance data record three yen purchases in the April to June quarter of 2026, on 30 April, 4 May and 6 May, totalling ¥11.7 trillion. Each was funded by selling US dollars. The 31 July operation is the one Japan describes as coordinated with the US Treasury. **Q: When will the 31 July operation appear in the official figures?** Japan discloses intervention at least monthly. The release published on 31 July covered 29 June to 29 July and recorded zero, so the joint operation is due in the next monthly figures. **Q: What did the US and Japan agree in September 2025?** Their finance ministries agreed to keep consulting closely on foreign exchange, said intervention should be reserved for combatting excess volatility and disorderly currency moves, and committed to disclosing any intervention at least monthly, alongside monthly reserves data and the currency composition of reserves once a year.