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Foreign Exchange

All articles tagged with #foreign exchange

Bessent Dismisses Warren’s FX Critique with ‘Foreign Exchange for Dummies’ Offer
business19 hours ago

Bessent Dismisses Warren’s FX Critique with ‘Foreign Exchange for Dummies’ Offer

Treasury Secretary Scott Bessent responded to Sen. Elizabeth Warren’s questions about the US-Japan yen intervention by mocking her FX knowledge and offering a 'Foreign Exchange for Dummies' tutorial. He argued the Exchange Stabilization Fund swap involved no new borrowing or debt for Japan and rejected Warren’s taxpayer-risk concerns, defending the move as necessary to prevent disorderly markets in coordination with Japan, while noting the exact size of the Treasury’s yen purchase has not been disclosed.

via New York Post|
#business#elizabeth-warren#exchange-stabilization-fund
Traders bet on renewed volatility in the yen after intervention
markets13 days ago

Traders bet on renewed volatility in the yen after intervention

Two weeks after a joint US-Japan intervention aimed at stabilizing the yen, traders are increasingly betting on further moves as the dollar hovers around ¥159; the carry-trade dynamic—funding high-yield bets with cheap yen—keeps yen under pressure, aided by high US yields and cautious BOJ policy. While intervention may have slowed the slide for now, a disorderly unwind remains a market risk that could ripple through US tech and EM assets, so policymakers face a delicate balance.

via Financial Times|
#carry-trade#currencies#foreign-exchange
Sankaran calls for steadier, multilateral yen interventions
economy14 days ago

Sankaran calls for steadier, multilateral yen interventions

In an Unhedged interview, Karthik Sankaran says the US–Japan yen intervention met criteria for multilateral action and could become more regular, though its effectiveness hinges on the Bank of Japan’s policy. He argues that dollar centrality, not just strength, drives policy and advocates broader, less selective FX tools. He also weighs the renminbi as an alternative, noting that a stronger yen could encourage renminbi appreciation and benefit global south economies.

via ft.com|
#currency-intervention#economy#foreign-exchange
Revisiting 1998: Will a Yen Intervention Reshape Markets Again?
business23 days ago

Revisiting 1998: Will a Yen Intervention Reshape Markets Again?

FT Alphaville explains the latest US-Japan yen intervention, arguing it echoes but may not replicate the 1998 episode: the 1998 move produced a brief intraday yen rally before renewed weakness as Russia’s default and the LTCM crisis unleashed a global unwind; today’s intervention sent the yen to about 155.5 intraday, but the outlook remains uncertain and likely hinges on exogenous shocks and potential Fed easing rather than a lasting reversal in the yen’s trend.

via Financial Times|
#1998#business#currency-intervention
United States and Japan Launch Rare Coordinated Effort to Stabilize Yen
world24 days ago

United States and Japan Launch Rare Coordinated Effort to Stabilize Yen

The U.S. and Japan carried out a rare, coordinated intervention to buy yen and arrest its slide to a 40-year low, aiming to curb volatility and reduce risks to Asian markets; the move signals strategic concerns about regional currency weakness and could reflect U.S. Treasury interests in supporting Asia-linked assets, but sustained yen stability will hinge on BoJ rate hikes and credible policy from Tokyo.

via cfr.org|
#bank-of-japan#currency-intervention#foreign-exchange
Yen intervention signals a shift in the dollar’s reserve dominance
economy24 days ago

Yen intervention signals a shift in the dollar’s reserve dominance

Barry Eichengreen argues that the joint yen intervention by the US Treasury and Japan’s Finance Ministry sends a message beyond market noise: the dollar’s status as a reserve currency is weakening, and the modest ¥14 trillion effort will be short-lived unless it is backed by stronger fundamentals, such as faster BoJ rate hikes. The use of euros to fund part of the operation and Washington’s cautious approach via facilities like FIMA suggest the US wants currency stability without triggering heavy dollar sales, implying central banks may diversify reserves more in the future.

via Financial Times|
#central-bank-intervention#economy#foreign-exchange
Yen Intervention: A US Treasury Shield, Not Just Currency Help
markets25 days ago

Yen Intervention: A US Treasury Shield, Not Just Currency Help

Friday’s joint US–Japan yen intervention briefly steadied dollar-yen around 156 after a move toward 164, but the FT’s Unhedged argues the motive is self‑preservation: shielding US Treasuries from higher yields by signaling Fed‑backed dollar liquidity via the FIMA facility, with Japan’s yields, US payrolls and Fed messaging likely to determine whether the effect lasts.

via Financial Times|
#bank-of-japan#fima#foreign-exchange
Korean won climbs 8% in July on chip earnings repatriation and hawkish policy tilt
markets27 days ago

Korean won climbs 8% in July on chip earnings repatriation and hawkish policy tilt

South Korea’s won jumped nearly 8% in July, the second-best global performer after Colombia, as repatriation of overseas earnings by chipmakers, a tech stock sell-off, and a tighter policy stance supported the currency. Repatriation flows—estimates of about $1 billion per day mid-July to mid-August—along with Samsung and SK Hynix’s announced investments and a blockbuster US listing for SK Hynix, helped domestic demand for won. The Bank of Korea raised rates to 2.75%, with Q2 GDP at 3.7% and inflation at 3.2%, suggesting policy could continue to support the won even as the Kospi fell sharply on AI stock weakness. Foreign outflows moderated but remained net selling, underscoring a shift in flow dynamics that aided the won’s rebound.

via Financial Times|
#currencies#emerging-markets#foreign-exchange
US Treasury backs yen rescue as Tokyo weighs further intervention
business27 days ago

US Treasury backs yen rescue as Tokyo weighs further intervention

The U.S. Treasury reportedly bought yen to shore up the battered Japanese currency, marking the first yen-buying intervention with Tokyo in more than a decade, with the New York Fed selling euros for yen on the Treasury’s behalf though amounts weren’t disclosed. Japan signaled potential policy action next week to deter speculative bets and stabilize markets, and indicated it can use tools like the Fed’s FIMA repo facility to access dollar liquidity as it presses to stem yen weakness.

via CNBC|
#business#currency-intervention#foreign-exchange
Japan signals readiness to rescue the yen as intervention risk rises
business5 months ago

Japan signals readiness to rescue the yen as intervention risk rises

The yen firmed modestly after a senior Japanese finance official warned decisive government action may be required, a message traders interpreted as a prelude to intervention. The currency traded around ¥159.8 per dollar after briefly approaching ¥160, with BoJ Governor Ueda saying currency moves are being monitored for their impact on forecasts. The episode comes amid ongoing speculation about potential government action, including talks of intervention in crude-oil markets to shield households from higher energy costs.

via Financial Times|
#bank-of-japan#business#central-banks
Bessent: US sticks to strong-dollar policy, no yen intervention planned
world7 months ago

Bessent: US sticks to strong-dollar policy, no yen intervention planned

Scott Bessent said the Trump administration remains committed to a strong-dollar policy and is not intervening in dollar–yen markets, fueling a dollar rally as traders reassessed intervention risk; he argued that sound fundamentals and policy will attract capital and strengthen the dollar over time, while speculation of official FX action has been denied.

via Financial Times|
#foreign-exchange#scott-bessent#us-dollar