U.S. Treasury Tells Major Banks to Be Ready for Possible Yen-Market Action

The yen is back in the spotlight after Japan was reported to have spent as much as $59 billion in a single day to prop up the currency. Now, the U.S. Treasury has warned major banks to be prepared for potential foreign-exchange market action as soon as Friday, a development that could ripple through the dollar, Treasury yields and Bitcoin. According to a person familiar with the matter, the Treasury, acting via the Federal Reserve Bank of New York, told several large banks to "stand ready for future action" in the FX market. The message came a day after Japanese authorities intervened to support the yen. Japan's operation is estimated at roughly $53 billion to $59 billion, placing it among the largest single-day currency interventions on record. The move helped pull the yen back from levels near a four-decade low versus the U.S. dollar. The currency was recently around 159.61 per dollar, up 0.06%. Possible U.S. involvement adds a new dimension to the fight over yen volatility, signaling growing concern among officials about the speed and scale of recent moves. Treasury Secretary Scott Bessent said the yen appears "very undervalued" and warned that excessive volatility is unhealthy for markets. He added that the yen has moved well beyond what could be considered a normal or "equilibrium" level. His remarks suggest Washington is less focused on targeting a specific exchange rate and more on limiting destabilizing swings that could spill over into broader markets. The last time the U.S. Treasury directly intervened to support the yen was in 2011, when G7 countries coordinated action after Japan was hit by a major earthquake and tsunami. For crypto markets, the key issue is what sustained intervention could mean for the dollar and global liquidity. Japan is a major holder of U.S. government debt. If it sells U.S. Treasuries to raise dollars for yen support, heavier bond selling could pressure Treasury prices and affect yields. At the same time, a softer dollar can increase Bitcoin's appeal as an alternative to dollar-based assets. If liquidity conditions improve and investors rotate away from cash and defensive positioning, Bitcoin could be an early beneficiary. A stronger BTC trend could then pull risk appetite toward Ethereum and smaller altcoins as momentum spreads across crypto markets.