Japan could formally confirm joint currency intervention with Washington on Monday, with one official telling Reuters the operation is still ongoing, turning the announcement into a live market event. Finance Minister Satsuki Katayama will make the announcement, and top currency diplomat Atsushi Mimura signaled the ministry is working closely with monetary policy, suggesting Tokyo may pair intervention with Bank of Japan rate hikes. Japan's finance ministry also noted it holds access to the Federal Reserve repurchase facility, allowing dollar liquidity without selling US Treasuries, addressing concerns that liquidating Japan's large Treasury holdings could spike US yields. Analysts see the cooperation driven partly by Washington's worry over rising Treasury yields, while former Bank of Japan official Nobuyasu Atago said both countries risk inflation running hot. Bitcoin trades near $63,000 and faces risk from a potential unwind of yen carry trades, as non-commercial yen short contracts reached 163,412 by late July, and any rapid yen appreciation could force leveraged selling across risk assets.
Possible BOJ rate hikes to support intervention would push Japanese government bond yields up.
Coordinated intervention may involve Fed repo facility, potentially easing upward pressure on US Treasury yields.