Strategists have indicated that the U.S. Treasury may have used the euro rather than the dollar to purchase yen, a move aimed at avoiding a depreciation of its own currency and preventing scrutiny of its strong-dollar policy. According to two sources, at least two major U.S. banks received inquiries from the Federal Reserve Bank of New York on Friday regarding the euro/yen currency pair.

Last week, reports citing unnamed sources stated that the New York Fed, acting on behalf of the U.S. Treasury, sold euros and bought yen. "The U.S. likely wants to avoid being seen as selling dollars," said David Forrester, a senior strategist at Amundi (formerly Credit Agricole CIB) in Singapore. "They adhere to a strong-dollar policy and do not want to appear as if they are trying to gain a competitive advantage by devaluing their currency, which would violate the G20's foreign exchange agreement."

Since Japan launched a new round of intervention on July 30, the euro has weakened against most G10 currencies, falling approximately 4% against the yen. The Bloomberg Euro Index edged down 0.2% on Monday but remained near its highest level since June 17. In a report to clients, JPMorgan strategists Junya Tanase and Patrick Locke wrote, "The primary goal of this intervention appears to be supporting Japan's request to prevent excessive yen depreciation, rather than weakening the dollar."