Intervention bought Tokyo three weeks. The carry trade that funds half the world's risk appetite is already back near record size — and this time the exit runs straight through the US Treasury market.
MACRO / JAPAN-US TRANSMISSION The Carry Trade That Could Break the Treasury Market: Inside Japan's Yen Defense and the 2026 Unwind Risk Intervention bought Tokyo three weeks. The carry trade that funds half the world's risk appetite is already back near record size — and this time the exit runs straight through the US Treasury market. By Dorian — ZTrader Research / ZMACRO At 11:33am on July 31, a Reuters photographer at Camp David caught Treasury Secretary Scott Bessent's notepad. Six words, visible over his shoulder: “To Do — Buy Japanese Yen $5-10 bil.” Within hours, Washington and Tokyo confirmed it — the first coordinated US-Japan currency intervention since 2011. The yen had just touched its weakest level against the dollar in roughly forty years. Japan's Ministry of Finance spent an estimated $53 billion buying yen between July 31 and August 1. The US Treasury sold euros alongside
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