New US report reveals yen rescue used euros, not dollars. That matters for Bitcoin

The US Treasury financed July’s yen intervention with euros from its reserves, the New York Fed confirmed in a November 12 report . For Bitcoin, the funding currency limits the operation’s significance as a signal of fresh Federal Reserve dollar liquidity. On July 31, the New York Fed bought 79.4 billion yen in the spot market against euro sales from Treasury’s Exchange Stabilization Fund, or ESF. The aim was to counter what Treasury viewed as disorderly yen moves. The New York Fed executed the trade as Treasury’s fiscal agent. The Federal Reserve itself did not intervene in foreign-exchange markets during the third quarter. Treasury’s ESF operating framework identifies yen and euros as its foreign-currency assets and describes the New York Fed’s trading role.

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