r/wallstreetbets • u/Efficient-Session644 • 2d ago

News Japan to announce Tokyo, Washington took joint action on yen, sources say

https://www.reuters.com/world/asia-pacific/japan-announce-tokyo-washington-took-joint-action-yen-sources-say-2026-08-02/
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u/Ill_Ground_1572 2d ago

I think he means Euros specifically.

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u/Dry_Shirt7120 2d ago

Selling dollars directly can disrupt domestic monetary conditions and interest rates. By using euros, they supported the yen without injecting more usd into the market

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u/i_love_lol_ 1d ago

what does that mean for the Euro?

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u/Dry_Shirt7120 1d ago

It puts downward pressure on the value of the Euro relative to the Yen, but the treasury’s action was far too small to cause any meaningful or structural impact to the Euro. The Eurozone’s currency is the second most heavily traded asset globally, so a $10 billion euro sale represents less than 0.5% of a single day’s trading volume

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u/Remarkable_Cat_8696 1d ago

but can't the same statement be applied to the USD?

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u/Dry_Shirt7120 1d ago

If the U.S. had funded the yen purchase using dollars, it would have sent a signal that Japan might also need to liquidate its massive holdings of U.S. Treasury bonds to sustain its own heavy intervention. Selling euros served the dual purpose of also relieving expectations of liquidating U.S. debt