The report confirms that the US is a willing partner in yen support, not just a bystander. That raises the risk for anyone betting heavily on dollar-yen above 160, a level that now looks well defended. Positioning is likely to turn more cautious as the pair approaches the summer’s intervention zone, and volatility could spike on any further rate checks. Rate expectations still favour the dollar, though, because the US economy is resilient and inflation is high. That means intervention may only slow the yen’s slide unless the BOJ follows through with a December hike to 1.5%.---Yesterday:Japan’s Mimura warns yen moves are too rapid as USD/JPY pushes back toward 160---Washington has now confirmed that it put its own money behind the yen this summer. With the currency back near 160, the main question is whether Tokyo and Washington can hold that line again.Summary:The New York Fed bought about 79bn yen (roughly $500m) on 31 July for the US Treasury, the first US yen-buying intervention since 1998The Fed made no foreign exchange interventions on its own account in the July to September quarterJapan’s Ministry of Finance intervened with about 15trn yen in coordination, and dollar-yen fell from around 164 to around 155 in a few daysRate checks on 30 July were carried out solely for the Treasury, and the yen rose more than 2% that dayThe yen has since weakened back toward 160, and Japanese officials warn that the intervention should not be forgottenMost economists expect the BOJ to raise rates to 1.5% in DecemberThe US Treasury bought Japanese yen in the third quarter, its first yen-buying intervention since 1998, while the Federal Reserve did not intervene in currency markets on its own account, the Federal Reserve Bank of New York said on Thursday. The New York Fed’s quarterly report on foreign exchange operations confirms that Washington acted alongside Tokyo this summer to stop a sharp slide in the Japanese currency, Reuters reported.According to the report, the New York Fed bought about 79 billion yen, worth roughly $500 million, in the spot market on 31 July. It paid with euros from the Treasury’s Exchange Stabilization Fund, and said the purchase was made to counter what the Treasury saw as disorderly moves in the yen. Rate checks on dollar-yen had been reported on 30 July. These are calls to dealers asking for prices, and markets often read them as a sign that intervention is coming. The report said the New York Fed made those checks solely on the Treasury’s behalf, acting as its fiscal agent. The yen rose more than 2% that day.Japan’s Ministry of Finance intervened at the same time, spending about 15 trillion yen during the quarter. The combined action worked quickly: between 30 July and 3 August, dollar-yen fell from around 164 to around 155. Treasury Secretary Scott Bessent said in early August that the US would not hesitate to join further intervention, and repeated his call for the Bank of Japan to keep raising interest rates.The yen’s recovery has not lasted. It has drifted back toward 160 per dollar, its weakest level since September. On Thursday, Atsushi Mimura, Japan’s vice finance minister for international affairs and its top currency diplomat, warned that it was too early to forget the summer’s intervention. Analysts at Mizuho Securities expect the dollar to keep rising against the yen, supported by a resilient US economy and inflation kept high by strong AI investment, and flagged the risk of fresh action by Japan.The Bank of Japan is the other tool available. Some BOJ policymakers called in October for faster rate rises, arguing that underlying inflation has reached the 2% target. Most economists in a Reuters poll expect the bank to raise its policy rate to 1.5% in December, after hikes in June and September. Now that the US is on record as a willing partner, any renewed push toward 160 and beyond is likely to meet stronger resistance from both governments. This article was written by Eamonn Sheridan at investinglive.com.