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Financial Times
US euro sale to prop up yen blindsided ECB
Last week, the US executed a sale of euros to prop up the yen, shocking the European Central Bank (ECB) who were informed after the fact. This operation, done by the New York Federal Reserve, is historically notable as it represents the first joint US-Japan currency intervention in nearly 30 years. Analysts view this as a breach of established cooperation norms among western central banks, which typically foster trust and coordination. The ECB is concerned this move might jeopardize long-standing monetary collaboration, which has been crucial for financial stability since WWII.
MonitorConfidence: MediumShort term horizon
Published 7 Aug 2026, 04:40 UTC3 min read
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Summary
TL;DR
- US sold euros to buy yen without prior coordination with the ECB.
- The intervention marked the first joint currency effort with Japan in 30 years.
- US sought to maintain dollar strength while supporting the yen.
- Japanese intervention saw over ¥13.8 trillion spent in two days.
- Market volatility raises questions regarding the Bank of Japan's response to inflation.
Interesting facts
- This unprecedented sale disrupts decades of monetary cooperation norms among the US, Japan, and Europe.
- Japanese authorities committed more funds in days than during previous intervention campaigns.