Treasury Secretary Scott Bessent says the US will keep backing Japan's efforts to stabilize the yen, a week after the two countries carried out their first coordinated currency intervention since 2011. The yen has slipped back to around 157.7 per dollar after briefly strengthening to 155.20, still well off the four-decade low near 164 hit in July.
Bessent said the US will continue supporting Tokyo's push to stabilize the yen, days after Washington and Japan jointly bought the currency in markets. According to Crypto Briefing: "We will do whatever it takes to support them", Bessent said during a CNBC interview Tuesday.
Yen weakness feeds Japan's inflation problem
Yen weakness had raised the cost of imported goods, including energy, worsening Japan's inflation problem, Bessent said. He warned that further declines could pressure other Asian currencies and trigger competitive devaluations. The Treasury secretary also cited recent volatility in the Korean won and said many market participants view China's renminbi as undervalued.
First joint intervention since 2011
The comments followed a coordinated operation in which the US Treasury joined Japanese authorities in buying yen last week, the first such joint intervention since 2011. Washington funded its side using euros from its reserves, and Bessent said Treasury officials had contacted European central banks and finance ministers, describing the move as a reallocation of US reserves.
As a result, the yen strengthened to about 155.20 per dollar after the intervention was confirmed Monday. It then weakened to around 157.7 on Tuesday as the initial rally slowed.
Bessent looks to Tokyo for policy follow-through
Bessent said intervention can signal markets but must be followed by changes in monetary and fiscal policy. He said he's confident Prime Minister Sanae Takaichi's government will pursue greater budget discipline and that Bank of Japan Governor Kazuo Ueda will take the necessary steps. Japan has said it won't hesitate to conduct further coordinated intervention, and Bessent said US officials remain in close contact with Tokyo, though he declined to prejudge whether the Bank of Japan should raise interest rates.
Source: Crypto Briefing
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