Macquarie: The U.S. may only buy 500 million yen in the joint intervention, and the shock of the demonstration effect is significant.

Gareth Berry, head of foreign exchange and interest rate strategy at Macquarie, stated that the "demonstration effect" of the joint US-Japan intervention on the yen has a "shock value far greater than the scale of the intervention funds." Berry wrote in a recent report: "We estimate that US authorities sold 500 million euros against the yen on Friday, July 31." "In terms of scale, this is a mere trifle compared to Japan's estimated sale of about 85 billion dollars against the yen over the two days of July 30 to 31." Given that the US spent relatively little on intervention actions last month, it is clear that "there is still plenty of firepower." "The US Treasury and the Federal Reserve together can mobilize up to 25.9 billion euros in reserves alone, so if the yen weakens again, they are fully capable of intervening in euros against the yen on a similar scale and multiple times." Theoretically, if the US were to shift to intervening in dollars against the yen, then the ammunition would be virtually unlimited.