US Treasury intervenes to support yen through purchases.

The U.S. Treasury intervened in currency markets on Friday by purchasing yen, joining Japan’s efforts to support the currency from near four-decade lows, the Financial Times reported.

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The Federal Reserve Bank of New York sold euros and purchased yen on behalf of the Treasury, according to the report, which cited people familiar with the transaction.

Goldman Sachs Group Inc (NYSE:GS) and Morgan Stanley (NYSE:MS) conducted the trades, the FT said.

Earlier on Friday, the Treasury informed several banks that it could intervene in the yen market and asked them to “stand ready for future action,” a person familiar with the matter told Reuters.

Reports of possible U.S. intervention helped strengthen the Japanese currency against the dollar during Friday’s session.

The move followed apparent intervention by Japanese authorities on Thursday. Bank of Japan data indicated that Japan may have sold as much as $58.97 billion to purchase yen as officials sought to curb the currency’s slide.

The coordinated action would mark a significant escalation in attempts to support the yen, whose weakness has increased Japan’s import costs and added to inflationary pressures.

A stronger yen can also weigh on Japanese exporters by reducing the value of overseas earnings when converted into the domestic currency.