Treasury Secretary Scott Bessent told the House Financial Services Committee that Washington used only a "nominal" sum in its coordinated intervention to support the yen. He defended the move as serving US interests, while Tokyo has spent a record $96.4 billion defending the currency on its own.
Treasury Secretary Scott Bessent said Tuesday that the United States deployed only a nominal amount in its coordinated intervention to support Japan's currency, defending the operation during testimony before the House Financial Services Committee.
A stronger yen benefits American exporters, Bessent said, and means Japan's government will not need to sell US assets to finance foreign-currency intervention.
Treasury joined a July intervention
The Treasury joined Japan in buying yen on July 31, after the Japanese currency fell to its lowest level against the dollar in four decades. Treasury watchers have calculated that the department used notably less than $1 billion in the operation, while Japan spent a record $96.4 billion from late July to late August defending its currency.
Tokyo's own record purchases likely involved selling dollars and Treasuries. Japan is the largest foreign holder of US government securities.
A nominal sum, a real signal
Bessent said that even a nominal amount let the Treasury signal support for Japanese policy, and the Treasury has made tens of millions of dollars on the yen operation, though profit was not the goal.
The Treasury Secretary has suggested in recent weeks that he wants to see the Bank of Japan raise interest rates to support the yen, and the central bank meets to set policy later this week. At a Southern Methodist University event in Texas last week, Bessent said he has insight into what Japanese policymakers will do. According to Investing.com: "And you can bet against me if you want."
In a letter to Senator Elizabeth Warren last month, Bessent wrote that disorderly yen markets can trigger forced unwinds that could destabilize global markets and raise borrowing costs for American families and businesses.
Source: Investing.com
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