US Treasury Buys Yen to Support Currency Following Camp David Notepad Leak

US Treasury Intervenes to Support Yen Following Camp David Notepad Leak

The intervention followed a visible leak during a cabinet meeting held at Camp David, Maryland, on July 31. A Reuters photograph taken over U.S. Treasury Secretary Scott Bessent’s shoulder at 11:33 EDT captured a notepad bearing the underscored words “To Do” followed by Buy Japanese Yen (JPY) $5-10 bil. Earlier that morning, around two hours prior to the photo, the Treasury had notified a number of banks that it might intervene in the yen market and instructed them to “stand ready for future action.”

Market Response and Historical Context

The U.S. currency had risen in recent weeks to nearly 164 yen, marking its highest level since 1986. News of the potential and actual intervention helped boost the Japanese currency, triggering a notable jump during late afternoon trading. According to LSEG data, the dollar dropped from about 158.9 yen at around 4:14 p.m. EDT to about 157.6 yen just before 5 p.m. EDT.

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The action marks the first time the U.S. has directly supported the yen since 2011, when Washington coordinated with fellow Group of Seven nations to stabilize markets following Japan’s devastating earthquake and tsunami disaster. The specific amounts of yen purchased by the Treasury were not indicated in the Financial Times report.

Japanese Monetary Actions and Policy Tools

Prior to the U.S. Treasury’s actions, Japanese authorities had also stepped in to prop up the yen in Tokyo. Central bank data indicated on July 31 that Japan may have sold as much as $58.97 billion to buy yen on July 30, signaling repeated efforts to stem the currency’s weakness. The Nikkei reported that Tokyo intervened again during New York trading hours on July 31.

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To soothe market worries regarding the limits of Japan’s firepower for large-scale intervention, the Japanese Finance Ministry posted on X that monetary authorities possess a broad range of tools to address market liquidity needs. The ministry stated that officials remain prepared to use available tools as necessary to support orderly market functioning, which could include potential access to the Federal Reserve’s standing Foreign and International Monetary Authorities (FIMA) Repo Facility. Introduced in 2020 to steady markets during the Covid-19 pandemic, the FIMA repo facility allows Japan to raise dollar liquidity without outright sales of U.S. Treasuries, potentially easing funding pressures on Tokyo.

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Upcoming Policy Outlook

Additionally, Japan and the United States may unveil a policy as early as the following week to address the yen’s weakness, Kyodo News reported, citing informed sources. That reported announcement would serve as a warning against speculative bets that have pressured the Japanese currency, with the overarching aim of stabilizing markets.

Responses from officials and institutions involved were limited outside regular business hours. The U.S. Treasury did not immediately respond to requests for comment regarding the Financial Times report or the Bessent notepad photograph, and the New York Fed and Morgan Stanley also did not immediately respond, while Goldman Sachs declined to comment.