The U.S. sale of euros and intervention in the yen caught Europe off guard.

According to informed sources, the United States unexpectedly conducted a historic monetary intervention with the European Central Bank last week to assist Japan, notifying its counterparts in Frankfurt only after selling euros to buy yen. Some senior officials at the European Central Bank believe that the U.S. use of euros instead of dollars is an unprecedented violation of the long-standing cooperation practices among Western monetary authorities. The operation aimed to help Japan support the yen's exchange rate, which had fallen to a 40-year low. Last week, Tokyo entered the foreign exchange market by selling dollars to buy yen. The U.S. sold euros rather than dollars to help Japan, further indicating that Washington wishes to avoid any intervention that could lead to a sell-off of U.S. Treasury bonds, thereby driving up U.S. Treasury yields.