Forex
$97 Billion Yen Intervention: US Treasury Clarifies No Debt Owed by Japan
US Treasury Secretary Scott Bessent has revealed that Japan owes the United States no debt following a massive yen intervention between July 30 and August 26. The total intervention reached $97 billion, with Bessent stating in a letter to Senator Elizabeth Warren that 'Japan owes nothing, so nothing can go unpaid.'
Bessent clarified that the US did not lend Japan any money but instead bought yen as part of the intervention. This means that there is no risk of default or repayment for a debt that does not exist.
The Exchange Stabilization Fund, which the Treasury Secretary can tap without Congressional approval, held $14.19 billion in euros and $2.57 billion in yen on June 30. Selling euros for yen was the only trade possible at that time.