Hayes: Monitor Fed H.4.1 Report for Japan Treasury Collateral in Yen Intervention

Arthur Hayes advises tracking the weekly Fed H.4.1 report to verify if Japan uses U.S. Treasuries as collateral for dollar funding to support the yen, citing potential counterparty limit changes.

Woofun AI reports that Arthur Hayes directed attention to this week's Federal Reserve H.4.1 report to verify whether Japan's Ministry of Finance is utilizing U.S. Treasuries in repurchase agreements to secure dollars for yen purchases. He noted that if Scott Bessent increases the counterparty limit, the Federal Reserve could leverage these Japanese-held Treasuries for money creation. This follows U.S. Treasury Secretary Scott Bessent's statement regarding coordinated foreign exchange actions with Japan to address "disorderly fluctuations" in the yen market.