The U.S. Treasury Secretary warned that disorderly movements in the yen could destabilize global markets and also referred to the possibility of higher borrowing costs in the United States. The letter was issued in response to inquiries about the intervention at the end of July. While it did not disclose details of the intervention, it explained the background to the yen-buying intervention.
In a letter released on X, Secretary of the Treasury Bessent (ベセント) pointed out that disorderly movements in the yen exchange rate could trigger forced unwinding of investment positions and destabilize global markets. He warned that excessive yen depreciation could ultimately push up borrowing costs for U.S. households and companies.
The letter responded to an inquiry from Democratic Senator Warren (ウォーレン) concerning the yen-buying intervention carried out by the U.S. Treasury at the end of July. While it did not disclose details such as the scale of the intervention or the amount of yen purchased, it indicated that the Exchange Stabilization Fund had exchanged foreign-currency assets for yen.
Bessent (ベセント) explained that, in accordance with the relevant laws and with the President’s approval, the U.S. Treasury has the authority to conduct foreign-exchange transactions to support an orderly exchange-rate system.