Updated
Updated · Bloomberg · Aug 3
JPMorgan Says US Treasury Has $38.5 Billion for Yen Support, Below Japan's $35 Billion-$60 Billion Interventions
Updated
Updated · Bloomberg · Aug 3

JPMorgan Says US Treasury Has $38.5 Billion for Yen Support, Below Japan's $35 Billion-$60 Billion Interventions

3 articles · Updated · Bloomberg · Aug 3

Summary

  • $38.5 billion in readily usable assets may leave the US Treasury with limited capacity for further coordinated yen support alongside Japan, JPMorgan said.
  • The bank said the Exchange Stabilization Fund held about $13 billion in euro-denominated assets and $25.5 billion in dollar assets as of June.
  • That pool looks modest against Japan's intervention operations from 2022 to 2026, which JPMorgan said ranged from roughly $35 billion to $60 billion.
  • JPMorgan added that US firepower could still expand substantially if officials chose more extraordinary measures beyond the Treasury's liquid resources.

Insights

Can a historic US-Japan coordinated intervention actually break the massive yen short squeeze, or is it merely a temporary band-aid?
Will the Bank of Japan's hesitation to aggressively hike rates render the US Treasury's unconventional funding tools completely useless?