Why the U.S. stepped in after decades to prop up Japan's yen — and what's at stake

The coordinated intervention was the first U.S.-Japan joint operation to buy yen since 1998.Manuel Augusto Moreno | Moment | Getty ImagesStock Chart IconStock chart iconJapan yen performance year-to-dateIndustry veterans told CNBC that one of Washington's biggest concerns was avoiding a scenario where Japan would need to dump large quantities of Treasuries to finance unilateral intervention, given how the North Asian nation is the largest foreign holder of U.S. government debt.Louise Loo, head of Asia economics at Oxford Economics, said that that was "possibly one of the key reasons" behind U.S. participation."There is a self-preservation element here. Volatile markets driven by potentially fiscally-aggressive policies from Japan could extend to the U.S. Treasury markets, destabilizing the dollar."Tokyo's and Washington's emphasis on the Federal Reserve's standing FIMA repo facility — which allows foreign central banks to obtain dollar liquidity without selling Treasuries outright — "was a clue that they'd like to avoid forced-selling as much as possible," she said. Japan's finance ministry said Monday it plans to use the FIMA repo facility for future interventions. Masahiko Loo, s...