Following coordinated intervention by Japan and the United States, the US dollar plunged against currencies other than the yen, despite the measures being aimed at curbing yen depreciation. The euro rose, while the recovery toward a stronger US dollar remained limited.
After coordinated intervention by Japan and the United States aimed at curbing yen depreciation resumed, EUR/USD rose sharply. USD/JPY appears to have seen little effect from the measures to curb yen depreciation, returning to a stronger US dollar and weaker yen immediately afterward, while the US dollar weakened more broadly against currencies other than the yen.
EUR/USD is currently well above its 120-day moving average, and hedge funds among speculative traders may have incurred unrealized losses on positions involving US dollar buying and euro selling. CFTC statistics showed that hedge funds had a net short euro position of 59,000 contracts as of 18 August. This has led to speculation that euro buying and US dollar selling could expand if euro appreciation and US dollar depreciation move beyond the breakeven point.
In a past example, the June 1998 intervention to curb yen depreciation involved selling US dollars and buying yen, whereas this time the authorities are said to have avoided intervention involving US dollar selling. One view is that US authorities did not choose to intervene by selling US dollars because they were concerned that the objective of curbing yen depreciation could trigger a sharp decline in the US dollar. US dollar weakness against currencies other than the yen has continued to spread following the latest intervention.