JP Morgan's analysis introduces a meaningful caveat to the recent show of unity between Washington and Tokyo on yen intervention: the US simply does not have deep pockets to match Japan's, at least not without extraordinary measures. If markets come to see US participation as symbolic rather than substantive, some of the confidence built by last week's joint action and Bessent's supportive comments could erode, particularly if the yen comes under renewed pressure and Japan is seen to be carrying the load alone. The finding that unconventional steps could lift Treasury capacity to around $187 billion, potentially doubling with Fed involvement, offers a more reassuring ceiling, but JP Morgan's own view that unlimited intervention is unlikely, given finite resources and the likely need for congressional funding, tempers that upside. Traders may increasingly focus on Japan's own intervention capacity and the BOJ's rate path as the more reliable levers, treating US firepower as a supporting rather than primary factor.---Earlier today:Bessent, Japan confirm Friday's joint yen intervention, vow further actionTrump frames yen intervention as financially beneficial to USThe US can talk tough on the yen, but JP Morgan says its actual ammunition is a fraction of Japan's.Summary:JP Morgan says the US Treasury has limited liquidity to support coordinated yen intervention with JapanThe Treasury's Exchange Stabilization Fund held about €13 billion of euro assets and $25.5 billion of other foreign assets as of JuneThat is small compared with Japan's intervention scale, estimated at roughly $35-60 billion in recent yearsUnconventional steps, including converting IMF Special Drawing Rights into dollars and swapping foreign-currency assets into dollars, could in theory boost Treasury firepower to about $187 billionFederal Reserve participation could effectively double that capacityJP Morgan does not expect unlimited Treasury intervention, since ESF resources are finite and additional funding would likely require congressional appropriationJP Morgan has cautioned that the US Treasury has only limited capacity to support coordinated currency intervention alongside Japan aimed at defending the yen, even as unconventional measures could meaningfully expand what Washington is able to bring to bear.The bank's strategists point to the Treasury's Exchange Stabilization Fund, the pool of foreign currency and other assets the US government can draw on to intervene in currency markets without needing new congressional approval, as the key constraint. As of June, the fund held about €13 billion in euro-denominated assets and $25.5 billion in other foreign assets. That is a modest sum next to Japan's own intervention activity, which has run at an estimated $35 billion to $60 billion in scale during bouts of yen-buying between 2022 and this year. In practical terms, if the US were relying solely on its existing foreign currency holdings, its capacity to match Japan barrel-for-barrel in a sustained defence of the yen would be constrained.JP Morgan notes, however, that the picture changes if Washington turns to less conventional tools. One option would be converting the US holdings of International Monetary Fund Special Drawing Rights, a kind of international reserve asset the IMF allocates to member countries, into usable dollars. Combined with swapping other foreign-currency assets the Treasury holds into dollars, JP Morgan calculates this could lift total Treasury firepower to around $187 billion, a substantial increase from the fund's current liquid foreign holdings. Involving the Federal Reserve, which has its own tools for supporting currency operations, could effectively double that figure again, giving the US a considerably larger theoretical war chest than its headline reserves suggest.Even so, JP Morgan is not framing this as an open-ended commitment. The bank said it does not expect the Treasury to intervene without limit, noting that Exchange Stabilization Fund resources are finite by design and that any significant expansion of US firepower beyond the unconventional steps outlined would likely require an appropriation from Congress, a step that would take time and carry its own political uncertainty. That caveat suggests that while Washington can meaningfully support Japan's efforts to stabilise the yen in the near term, particularly through the kind of unconventional measures JP Morgan describes, the scale and duration of that support has real limits, and the heavy lifting in any sustained defence of the currency is likely to continue falling primarily to Tokyo. This article was written by Eamonn Sheridan at investinglive.com.