The United States is moving to prevent Japan from selling US Treasuries through coordinated intervention. Japan holds approximately 1.1 trillion dollars in US government bonds, and continued unilateral intervention would have required sales, risking a rise in Treasury yields. In a statement, US Treasury Secretary Bessent proposed expanding the FIMA repo facility in the coming months, outlining a plan to strengthen a mechanism that allows Japan to pledge Treasuries as collateral to the Federal Reserve instead of selling them in the market when it needs dollars. The intervention used euros rather than dollars, and the risk of a rapid unwinding of yen carry trades is also in focus. However, JPMorgan notes that the Treasury's capacity for further yen buying is limited, and some view the intervention as merely a stopgap measure.
JPMorgan Chase & CoJPMorgan notes Treasury's capacity for further yen buying is limited, viewing intervention as stopgap; mixed implications for bank.
