FX.co ★ US Treasury says yen rescue averted global turmoil and helped US exporters

US Treasury Secretary Scott Bessent defended Washington’s decision to support the Japanese yen and called the operation beneficial for America. In late July, the yen fell against the dollar to a forty-year low. Following the slump, US authorities, together with Tokyo, intervened in the FX market to jointly buy the Japanese currency. Speaking to Congress, Scott Bessent said that a stronger yen helps American exporters sell their goods. He added that the move also spared Japan from having to sell US government bonds en masse.

The amounts spent by the countries were not comparable. Japan spent a record $96 billion selling US dollars and bonds. US Treasury spending, by contrast, amounted to less than $1 billion. According to Bessent, that relatively small sum helped rescue a key partner and even generated tens of millions of dollars in gains. The main goal was to prevent disruption in global markets: a collapse of the yen threatened a wave of bankruptcies, panic, and a sharp rise in borrowing costs for US consumers and businesses.

At the same time, Bessent increased pressure on the Bank of Japan ahead of its next policy meeting. He anticipates rate hikes, since only such hawkish moves can reliably strengthen the yen without ongoing currency interventions. Speaking in Texas, the secretary said he was confident in the regulator’s forthcoming decisions and invited skeptics to bet against him. Washington is signaling that it will not indefinitely fund another country’s currency and expects Tokyo to take independent steps to correct the situation.