The FRB minutes confirmed that the July coordinated US-Japan intervention to buy yen was funded by the US Treasury, with the Federal Reserve Bank of New York executing the transactions on the Treasury's behalf. Japan intervened with a record ¥15.4 trillion through the end of August, and the possibility of another intervention remains.
According to the US FRB's September FOMC minutes, the coordinated US-Japan intervention to buy yen at the end of July was funded by the US Treasury, while the Federal Reserve Bank of New York executed the transactions solely as the Treasury's agent. Neither the FRB's own funds nor SOMA was involved.
According to Treasury statistics, Japan's intervention totaled a record ¥15.4 trillion, or approximately $97.5 billion, over the month through 26 August. The intervention was conducted jointly by the United States and Japan on 31 July, when the yen had fallen to levels near its weakest against the dollar since the 1980s.
Looking ahead, both the United States and Japan have indicated an intention to intervene again. Market participants, however, believe the yen could come under renewed downward pressure if the Bank of Japan's pace of rate hikes fails to keep up with the FRB.