The recent US intervention involving the sale of euros to support the yen surprised the European Central Bank (ECB). The ECB was not informed until after the transaction was completed, which marks a departure from traditional coordinated efforts among western central banks. The US Treasury's actions, executed by the New York Federal Reserve, raised concerns over trust and cooperation between monetary authorities. Economists believe this intervention was aimed at preventing Japan from selling US Treasuries amidst rising borrowing costs. Japan's own interventions to fortify the yen involved a substantial amount, exceeding previous efforts. This incident highlights growing tensions and disparities in financial strategies amid the current economic climate.

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US euro sale to prop up yen blindsided ECB

Christine Lagarde and Scott Bessent spoke only after Washington’s historic intervention

A large yellow euro symbol stands in the ECB lobby as visitors walk past, with EU flags visible. The ECB was made aware of the US move to sell euros to buy yen on Friday after the trade had been executed© AFP or licensors

Olaf Storbeck in Frankfurt, Claire Jones in Washington and Kate Duguid in New York

PublishedAugust 7 2026

UpdatedAugust 7 2026

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Washington’s sale of euros to boost the yen late last week blindsided the European Central Bank, with the US only informing its counterparts in Frankfurt after the historic currency intervention.

The ECB was made aware of the US’s move to sell euros to buy yen on Friday after the trade had been executed, according to several people familiar with the matter.

ECB president Christine Lagarde and Treasury secretary Scott Bessent spoke about the intervention on Saturday, one of the people said.

The lack of co-ordination highlights the unusual nature of the first joint Washington-Tokyo effort to boost the yen in almost 30 years. Typically, the US would have been expected to use dollars in such an operation.

Some senior ECB officials viewed the US decision to use euros in its trade as an unprecedented breach of longstanding conventions on co-operation between western monetary authorities, the people said.

Since the second world war, western central banks and finance ministries have stressed mutual trust and consultation, with previous interventions in currency markets usually happening in a co-ordinated manner.

Washington’s sales of euros, carried out by the New York Federal Reserve on behalf of the US Treasury, were “very striking” and “sad”, one person familiar with discussions among European policymakers told the FT.

“This has never happened before,” they added, saying that decades of close co-operation between western central banks that fostered financial stability and economic growth may have come under threat.

A Treasury spokesperson told the FT that the US finance ministry did not co-ordinate decisions on the allocation of reserves within the department’s Exchange Stabilization Fund, which it used to undertake the intervention, with foreign authorities.

“Decisions regarding the allocation of the Exchange Stabilization Fund are made by the US Treasury, taking into account assessments by the Treasury and the Federal Reserve of market liquidity, valuations and other relevant considerations,” the spokesperson said.

“Consistent with that authority, the Treasury reallocated reserve assets within the ESF last week,” the spokesperson added.

A senior Trump administration official noted that “we respect the confidentiality of private discussions with our international counterparts, unlike the ECB”.

The ECB and New York Fed declined to comment.

The American authorities sold euros as sales of dollars could have been perceived as a move to weaken the US currency and undermine Bessent’s strong-dollar policy.

Economists and analysts have also speculated that Washington joined Japan in intervening to keep Tokyo from selling Treasuries at a time when long-term American borrowing costs are running near 19-year highs.

Analysts suggest, based on provisional data from the Bank of Japan, that Japan alone may have spent approximately ¥13.8tn ($87bn) over two days to support the yen.

“Japan appears to have committed more funds in just two trading days than during its previous record intervention campaign [of ¥11.73tn in April and May], underscoring the authorities’ concern over the rapid depreciation of the yen,” said Mizuho analyst Masayuki Nakajima.

The interventions by the US and Japan pushed the yen sharply higher from almost ¥164 to the dollar earlier this month, its lowest level since 1986, to about ¥157. It has since weakened to ¥158. Traders have warned that concerns linger that the BoJ is not moving quickly enough to contain rising inflation.

While the BoJ held interest rates steady at its most recent meeting in July, governor Kazuo Ueda said: “We believe there is a greater need than before to pay attention to upside risks to inflation.”

Traders are putting a 44 per cent chance that the BoJ will increase interest rates at its next meeting in September.

The moves in Japan have come alongside a sharp jump in long-dated Treasury yields, as traders have been pricing in an increased risk that the Fed may not raise interest rates from current levels. While inflation in the US eased in June, it remains far above the Fed’s own 2 per cent target.

Additional reporting by David Keohane in Tokyo

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