Bessent Seeks FIMA Expansion to Curb Yen Volatility

Treasury Secretary Scott Bessent is pushing for an expansion of a Federal Reserve facility that lets foreign central banks swap US Treasuries for dollars. The goal is to give Japan a way to stabilize its currency without selling American government bonds on the open market.

The yen has been sliding toward levels not seen in roughly 40 years, with Bessent describing it as 'very undervalued.'

In late July 2026, the US executed its first yen-buying intervention since 2011, coordinated directly with Japanese officials. The move reportedly involved the US Treasury purchasing Japanese yen through the New York Fed, selling euros in the process.

Bessent wants to raise the ceiling on the Foreign and International Monetary Authorities Repo Facility (FIMA), which typically allows up to $60 billion per institution. He believes this would help prevent a repeat of the 2024 yen carry trade unwind chaos that briefly dragged Bitcoin below $50K as leveraged positions across asset classes blew up simultaneously.