Bessent’s ‘To-Do’ Note Suggests US Strategy to Support Japanese Yen
The U.S. Treasury is considering a significant intervention in the Japanese yen market, with plans to purchase between $5 billion and $10 billion worth of the currency. This development emerged from a photograph taken during a cabinet meeting at Camp David, where Treasury Secretary Scott Bessent was seen with a notepad indicating the yen purchases. The image, captured on Friday, coincided with reports that the U.S. Treasury had alerted several banks to prepare for potential market intervention.
Japanese authorities have already taken steps to bolster the yen, which saw a notable increase during morning trading in Tokyo. Data from LSEG indicated that the dollar fell from approximately 158.9 yen to around 157.6 yen, a decline of about 0.8%. This rise in the yen follows Japan’s recent interventions aimed at stabilizing the currency amid ongoing weakness.
Joint Intervention with the U.S.
The Financial Times reported that the U.S. has intervened alongside Japan to support the yen, marking Washington’s first such action in over a decade. The Federal Reserve Bank of New York reportedly sold euros to acquire yen through Goldman Sachs and Morgan Stanley, although the exact amount of yen purchased remains undisclosed. If confirmed, this would be the first direct support for the yen by the U.S. Treasury since 2011, when it participated in a coordinated effort with G7 nations following Japan’s natural disasters.
Japan’s Currency Defense Efforts
Recent data from Japan’s central bank suggests that the country may have sold as much as $58.97 billion to buy yen on Thursday, reflecting ongoing efforts to defend the currency. The yen has experienced sharp gains in recent months due to repeated interventions, including a significant rally during New York trading hours after coordinated buying efforts with South Korea. This intervention has helped the yen recover from near four-decade lows, achieving its largest one-day gain against the dollar in nearly two years.
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