(Bloomberg) -- The US Treasury stopped short of explicitly endorsing Japan’s action to intervene in the foreign-exchange market Thursday, while saying it understood the move.
“The Bank of Japan today intervened in the foreign-exchange market,” Treasury spokesman Michael Kikukawa said in an emailed statement. “We understand Japan’s action, which it states aims to reduce recent heightened volatility of the yen.”
Japan earlier Thursday intervened to buy the yen for the first time since 1998, after the currency had tumbled in reaction to a widening gap between US and Japanese central-bank policy rates.
The US didn’t participate in the intervention, Kikukawa added.
Read More: Japan Intervenes to Support Yen for the First Time Since 1998
Treasury Secretary Janet Yellen in July expressed her unwillingness to support an intervention to prop up the yen, which by then was already well into its current slump.
“In general, our view is that countries like Japan, the United States, the G-7 countries, should have market-determined exchange rates,” Yellen said during a trip to Tokyo in July. “Only in rare and exceptional circumstances is intervention warranted and we did not discuss intervention.”
The Treasury said on Sept. 7 -- by when the yen was on course for its biggest annual decline against the dollar in the floating-exchange-rate era -- that its view had not changed.
(Updates with past Yellen comments on intervention in fifth paragraph.)
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