Bessent Defends US Intervention to Support Japanese Yen

US Treasury Secretary Scott Bessent defended the US intervention to prop up the Japanese yen, stating that it's more than just a market intervention. He emphasized the importance of having a stable JPY for both the US and the entire region.

Bessent pointed out that Japan is making efforts to stem its currency undervaluation and moving towards budget discipline. He noted that once investments made by Japanese citizens and their pension system are accounted for, Japan's debt-to-GDP ratio doesn't look as bad as it does otherwise.

A stable JPY is crucial not just for the US but for the entire region, Bessent said. If the yen were to weaken substantially, other currencies would follow, leading to excess volatility in the Korean Won and potentially undervalued Chinese RMB. The Japanese government understands this importance, and the US is proud to stand with them in implementing policies to stabilize the region.

The US Treasury sold euros to buy yen last week as part of its intervention efforts, with some analysts crediting late Prime Minister Shinzo Abe's economic policies for pulling Japan out of deflation. Despite the move, retail sentiment on Stocktwits regarding the S&P 500 ETF remained in bearish territory.