Weaker Swiss franc may emerge as consequence of US-Japan yen intervention

When the US and Japan decided to tag-team the currency markets to rescue the yen from multi-decade lows, the Swiss franc was probably the last currency expecting collateral damage. Yet here we are: a coordinated intervention worth an estimated $75-85 billion has begun reshaping global forex dynamics in ways that could actually benefit Swiss exporters and the Swiss National Bank alike. The intervention, which kicked off around July 30 after the dollar-yen pair climbed to roughly 164 yen per dollar, marked the first time the US actively participated in defending the yen since 2011. Japan’s Ministry of Finance led the charge, deploying tens of billions in yen purchases to arrest the currency’s slide. The US Treasury played a supporting role, adopting an unusual tactic of purchasing euros as part of its intervention toolkit. Treasury Secretary Scott Bessent signaled willingness for further coordinated action, a stance that makes sense when you consider Japan holds over $1.1 trillion in US Treasuries. The initial results were dramatic. The yen rallied as much as 5% intraday following the intervention. By mid-August, the pair had settled around 158-159, meaning the yen retraced roughly h...