Bundesbank president criticizes US for selling euros to prop up the yen without telling Europe first

Joachim Nagel, the president of Germany’s Bundesbank and a member of the ECB Governing Council, went public on September 1 with a pointed rebuke of the United States for selling euros to support the Japanese yen, all without giving European partners a heads-up beforehand. The move, which took place around July 31, represented the first joint US-Japan currency intervention in roughly three decades. And the ECB only found out about it after the trades had already been executed. Nagel’s word for it: “blindsiding.” What actually happened In late July and early August, Japan was staring down a sharp depreciation of the yen. Tokyo responded aggressively, with Japanese interventions totaling approximately ¥13.8 trillion, or around $87 billion, over just two days. The US joined the effort by selling euros to purchase yen on behalf of the Treasury’s Exchange Stabilization Fund. That’s the key detail that has European officials fuming. Washington didn’t sell dollars to buy yen. It sold Europe’s currency. The ECB was informed only after the fact. Under the unwritten rules that have governed coordination among Western central banks since the post-World War II era, that’s a serious breach of pr...