US Treasury Secretary Scott Bessent justified yen-buying intervention in a letter to a Democratic senator. He expressed concern that sharp fluctuations in the yen could destabilize global markets and pointed to the possibility that an excessively weak yen could signal higher US interest rates.
US Treasury Secretary Scott Bessent said on the 28th that he had justified yen-buying intervention in a letter to a Democratic senator, warning that disorderly movements in the yen could confuse investors and destabilize global markets. The letter was dated the 27th and was not considered to be a post responding to the yen's decline on the 28th.
Bessent argued that an excessively weak yen could ultimately lead to higher US interest rates, potentially raising financing costs for US households and businesses. He also pointed out that Japan is a major holder of US Treasuries as well as an extremely important trading partner and ally.
He explained that the intervention used the foreign-currency assets of the Exchange Stabilization Fund, which can be used without congressional approval.