Bessent Pledges US Support for Yen Stabilization Efforts

Bessent confirmed the Treasury’s direct involvement in last week’s joint intervention, highlighting that the yen’s current undervaluation poses an unhealthy threat to global economic stability. While stopping short of detailing the specific mechanics of the joint operation, he signaled support for expanding the Foreign and International Monetary Authorities (FIMA) Repo Facility. This COVID-era backstop, currently capped at $60 billion, could see an increase to better reflect the scale of today’s bond market, a measure Bessent describes as essential for keeping financial volatility offshore.

Addressing concerns regarding the reallocation of U.S. reserves—specifically the sale of euros to acquire yen—the Treasury chief noted ongoing dialogue with European central banks to ensure transparency. He emphasized that the primary focus remains the Takaichi government’s policy shift to correct the yen’s trajectory. Bessent also dismissed recent speculation surrounding a photographed "to-do" list that referenced a $5-10 billion purchase of Japanese yen, characterizing the note as a lighthearted attempt to engage reporters rather than a formal disclosure of strategic intent.