Bundesbank's Nagel Slams U.S. for Unannounced Euro Sales to Back Yen

Bundesbank President Joachim Nagel, who also sits on the European Central Bank's Governing Council, said on Sept. 1 that the United States blindsided European officials by selling euros to support the Japanese yen without prior consultation. The operation, carried out around July 31, marked the first U.S.-Japan joint currency intervention in about 30 years. According to Nagel, the ECB learned of the transactions only after they had been executed. Japan had faced a rapid slide in the yen in late July and early August and responded with aggressive market action totaling roughly ¥13.8 trillion (about $87 billion) over two days. The United States participated by selling euros to buy yen through the Treasury's Exchange Stabilization Fund. European officials have taken particular issue with the choice of instrument: Washington did not sell dollars to purchase yen, but instead used Europe's currency. Nagel argued the episode violates long-standing, informal coordination norms among major Western central banks dating back to the post-World War II era, under which large-scale interventions are typically discussed in advance due to their market-wide spillovers. Historically, the last U.S.-Japan cooperative effort to support the yen was in 1998 during the Asian financial crisis. The most recent coordinated G7 intervention involving the yen occurred in 2011 after Japan's earthquake and tsunami, when authorities acted jointly to counter an abrupt yen surge. Nagel said the 2026 intervention departed from that multilateral model and underscored the need for tighter coordination, echoing broader concerns in Europe that the frameworks supporting global monetary stability may be weakening.