The US Treasury Department has notified major financial institutions that it may intervene in the foreign exchange market to support the Japanese yen as early as Friday.
A source familiar with the matter told Reuters that the department instructed banks to "stand ready for future action," marking a significant escalation in Washington's efforts to curb excessive currency volatility.
The warning comes as the yen has faced sustained pressure, prompting previous interventions by Japanese authorities.
The US move signals a potential shift toward coordinated action between Washington and Tokyo, aiming to stabilize the currency without forcing the Bank of Japan to accelerate its own monetary tightening cycle.
Such coordination would represent a notable departure from recent years, where FX interventions have largely been unilateral.
Markets are likely to react with increased caution in the USD/JPY pair, with traders monitoring for signs of official buying support.