Japan Likely Sold Treasuries to Fund Record Yen Intervention

• Japan likely sold a record amount of foreign securities, including US Treasuries, to finance its recent currency intervention aimed at supporting the yen.
• This action raises concerns in Washington regarding the impact on Treasury yields, especially with upcoming US midterm elections.
• While Japan has alternative intervention methods like the FIMA Repo Facility, selling Treasuries remains a possibility, though it could attract US pressure.

Topics: Asset types, Jurisdictions, Public debt, Financial instruments, Established hubs, Tokenized us treasuries

Tags: #japan #yenintervention #ustreasuries #foreignreserves #currencyintervention #financeministry #scottbessent #marketstability #longtermyields #fimarepofacility

Read more

Arthur Hayes Flips the Yen Risk Thesis for Bitcoin

Key Takeaways For Bitcoin, how Japan strengthens the yen may matter more than the currency move itself. Hayes’s scenario relies […] The post Arthur Hayes Flips the Yen Risk Thesis for Bitcoin appeared first on Coindoo.

• Arthur Hayes proposes a new thesis where Japan could strengthen the yen by utilizing the Federal Reserve's FIMA Repo Facility, rather than aggressive Bank of Japan tightening.
• This strategy would involve Japan exchanging US Treasury securities for dollars, which they would then sell for yen, potentially injecting dollar liquidity into the market.
• However, the FIMA facility is currently unused, and Hayes's scenario hinges on significant policy changes by the Federal Reserve and substantial, persistent usage by Japan.

Topics: Asset types, Jurisdictions, Market cycles macro sensitivity, Financial instruments, Cross jurisdictional policy, Interest rate sensitivity

Tags: #arthurhayes #bitcoin #yen #fimarepofacility #federalreserve #ustreasuries #liquidity #monetarypolicy #bankofjapan

Read more

By propping up the yen, the U.S. and Japan are actually admitting dollar dominance isn't what it used to be, top economist warns | Fortune

"When this message sinks in, other countries will redouble their search for more attractive, readily usable alternatives."

• The U.S. and Japan's recent currency intervention to support the yen signals a potential weakening of the dollar's global dominance, according to economist Barry Eichengreen.
• The intervention methods, avoiding direct sales of Treasuries, highlight concerns about rising yields and the U.S.'s ability to absorb its large budget deficit and private debt issuance.
• While some see this as a move towards alternatives like gold, others, like Goldman Sachs, argue it demonstrates the dollar's continued strength and unique infrastructure.

Topics: Public debt, Jurisdictions, Market cycles macro sensitivity, Tokenized us treasuries, Established hubs, Interest rate sensitivity

Tags: #dollardominance #yenintervention #ustreasuries #federalreserve #budgetdeficit #interestrates #reservecurrency #gold #fimarepofacility #dedollarization

Read more

Analysis: Federal Reserve may be pulled into Bessent’s effort to support Japan’s yen

Treasury Secretary Scott Bessent wants to defend the yen without selling Treasurys into a sensitive U.S. bond market. The Federal Reserve could help.

• The U.S. Treasury, led by Secretary Scott Bessent, is seeking the Federal Reserve's assistance to support Japan's weakening yen without destabilizing the U.S. Treasury market.
• A key proposal involves expanding the Fed's FIMA Repo Facility, allowing Japan to borrow Treasurys instead of selling them, thereby mitigating upward pressure on U.S. yields.
• This situation highlights a potential shift in the relationship between the Treasury and the Fed, with new Chairman Kevin Warsh signaling a willingness for greater collaboration on international financial matters.

Topics: Jurisdictions, Public debt, Banks bankingsystems, Cross jurisdictional policy, Tokenized us treasuries, Core banking integration

Tags: #federalreserve #scottbessent #japaneseyen #ustreasurys #fimarepofacility #currencyintervention #kevinwarsh #carrytrade #treasuryyields #swapline

Read more