US Treasury Secretary Scott Bessent reportedly warned the market to bet on a weaker yen and claimed to understand the moves of the Japanese government and the Bank of Japan. He was also reported to have discussed market developments following the joint US-Japan intervention in July.
US Treasury Secretary Scott Bessent reportedly warned market participants at an event not to bet on a weaker yen, saying that he had a broad understanding of the inner workings and moves of the Japanese government and the Bank of Japan. Drawing on his experience as a hedge fund professional, he was also reported to have said, in substance, “I am the house (HOUSE) now.”
It was explained that a joint yen-buying foreign-exchange intervention had been carried out with the Japanese government on 31 July. The yen surged immediately after the intervention, but the gain subsequently narrowed substantially as traders pointed out that buying power was limited.
Secretary Bessent did not deny the view that “the Treasury secretary is taking a risk,” and claimed an informational advantage. He was reported to have publicly warned market participants not to bet on a weaker yen.
It has been suggested that the Bank of Japan could move to support the yen exchange rate. Bloomberg reported on the 18th of this month that the Bank of Japan was inclined to raise its policy rate by 0.25 percentage points.