Global currency policy may be on the verge of a major shift comparable to the 1985 Plaza Accord. According to Citi Research analysts, markets are beginning to see the emergence of the so‑called Bessent doctrine—Treasury Secretary Scott Bessent’s strategy for radically correcting global trade imbalances.
The first clear sign of the new course came with Washington and Tokyo’s coordinated intervention in July. When the dollar rose to a 40‑year high around ¥164, the US Treasury drew on the Exchange Stabilization Fund (ESF). Bessent ordered aggressive yen purchases using the fund’s reserves, reportedly in euros, and the operation was carried out without offering Japan any credit lines.
Citi believes the US‑Japan currency pact is only a warmup before the main confrontation, with China as Bessent’s ultimate target. If a forced strengthening of the yen pulls the broader Asian currency bloc higher, the United States expects to bring Europe to its side. A unified front may allow Washington to demand in ultimatums that Beijing stop weakening the yuan.
The “Bessent doctrine” is built on five pillars: economic security, reciprocal free trade, rules for the next‑generation economy, financial dominance, and protection of American workers. The underlying objective of all these measures is to eliminate the chronic US current account deficit.
Analysts caution, however, that administrative intervention could run into market realities. The weakening of the yen is tightly linked to hedging dynamics amid a rising equity market, which materially complicates the Treasury’s task. While the current agreement does not automatically imply a collapse of the dollar, it sets a dangerous precedent for future coordinated attacks on the currencies of America’s trade rivals.