Traders are spoiling for a fight over the yen
After historic US-Japan intervention on the currency, the risk of market ructions is again rising
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TWO weeks after the historic joint US-Japanese effort to stop the rot in the yen, it is increasingly clear that the market is in the mood for a fight.
The Japanese currency did perk up, a fortnight ago, when US Treasury Secretary Scott Bessent embarked on the first bilateral intervention in the yen since 1998. The New York Fed’s yen-buying endeavours helped to pull the US dollar down from an eye-watering 164 yen to more like 156 yen.
In interventions, that is decent bang for your buck (or for your euro, in this case, since that is the currency Bessent chose to use on this occasion, startlingly, without consulting his European counterparts first).
