Yen intervention boosts FX, EBS hits highest JPY volumes in a decade

Currency trading venues experienced a boost in volumes on Friday as the US Treasury stepped into FX markets to stop the slide of the Japanese currency, which hit a 30-year low against the dollar in recent sessions.

The intervention, which took place in the euro and yen markets, provided a major boon for trading platforms, with Cboe FX and Euronext FX both printing close to double their July ADVs, with the former handling nearly $100bn of flows while the latter shifting more than $50 billion in a single day.

EBS, the primary open-market platform for the yen, hit a ten-year high in spot volumes with $102 billion of yen trades going through the venue. Across the CME Group platforms a record $158 billion of trades were registered, with futures in the yen hitting an all-time record at $52 billion and some $10 billion went through the FX Spot + pool. 

EBS Market for spot JPY saw a range of 594 JPY pips (trading from 163.74 touch high to 157.80 touch low), with around 97% price points in this range traded by the end of the day. 

The US Treasury sold euros to buy yen on Friday after the Japanese currency sank to 30-year lows against the dollar, the FT reports, marking the first direct intervention in currency markets from US authorities in decades.

The Treasury instructed the New York Fed to conduct the operation, which was done through Goldman Sachs and Morgan Stanley, according to reports. The intervention is the first time the Treasury stepped in to influence exchange rates since 1998, aside from the coordinated efforts across central banks in 2011.

The dollar hit a multi-decade low on July 23, recovering from the lows throughout the week but sinking 1.9% on Friday before the Treasury stepped in.