The US Sold Euros to Save the Yen — and Broke a 70-Year Norm with the ECB

On July 31, 2026, the U.S. and Japan executed their first joint yen-buying intervention since 1998 — but with a highly unusual twist: the U.S. Treasury, via the New York Fed, sold euros rather than dollars to buy yen, and notified the European Central Bank only after the trade was complete. Senior ECB officials called it an unprecedented breach of post-WWII Western currency cooperation norms .

Intervention amounts

Japan spent an estimated $36.58 billion on July 31, the second day of a two-day campaign. The prior day, July 30, Japan spent roughly $58.97 billion, bringing the two-day total to approximately $95.5 billion . The U.S. contributed an estimated $5–10 billion through the New York Fed, executing the trade via private banks including Goldman Sachs and Morgan Stanley .

Market impact

Before the intervention, USD/JPY had slumped to the 163–164 range, near 40-year lows . Immediately after the operation on July 31, the dollar-yen rate plunged roughly six yen in about an hour, settling near 157 — a swing of about 4% . By August 7, however, the yen had given back roughly half its gains, trading around 158.45, as markets digested the sustainability of the intervention .

Rationale for using euros

The U.S. sold euros instead of dollars to avoid conflicting with Treasury Secretary Scott Bessent's stated strong-dollar policy. Selling dollars directly to buy yen would have been seen as a de facto weakening of the dollar — something Bessent has publicly committed to avoiding. By selling euros, the U.S. could support the yen without undermining the dollar's official posture . The move was described as a "tactical currency play" by Bessent .

Lack of ECB coordination

In a sharp break with post-WWII norms of prior consultation among Western monetary authorities, the U.S. did not inform the ECB before executing the trade. The New York Fed sold euros to buy yen on July 31, and the ECB was notified only after the transaction had closed . ECB President Christine Lagarde and Treasury Secretary Bessent only spoke about the move a day later, on August 1 .

ECB reaction

Senior ECB officials described the U.S. unilateral sale of euros without advance notice as an "unprecedented breach" of long-standing conventions among Western central banks . Some ECB officials were reported to be "baffled" and felt "betrayed" by the lack of consultation, viewing it as a violation of the trusted consultation norms that have governed transatlantic monetary relations since the Bretton Woods era .

BlackRock's assessment

BlackRock assessed that the U.S. selling euros for yen without warning European policymakers is adding to geopolitical risks and further dimming the appeal of longer-maturity government bonds. The asset manager noted that while the yen intervention is unlikely to directly hurt European government bonds, the surprise nature of the operation undermines transatlantic financial coordination at a time of elevated geopolitical tension. James Turner, BlackRock's head of global fixed income EMEA, said the surprise maneuver shows countries are becoming "a little less cooperative" .

Readiness to intervene again

Japan has confirmed it "will not hesitate to take further action," with the Finance Ministry explicitly stating its readiness for additional interventions . The U.S. Treasury informed banks before the July 31 operation that they should "stand ready for future action" regarding possible yen intervention . Bessent publicly stated the U.S. backed Japan's move because a stable yen is critical to regional trade and financial stability, warning that further yen weakness could pressure other Asian currencies and contribute to competitive devaluations .