Bessent Pushes for FIMA Expansion Amid Yen Crisis

Treasury Secretary Scott Bessent is pushing to expand a Federal Reserve facility that allows foreign central banks to swap US Treasuries for dollars, aiming to support Japan's struggling currency.

The yen has been plummeting towards levels not seen in about 40 years, with Bessent describing it as 'very undervalued.' In July 2026, the US executed a coordinated intervention with Japanese officials, buying yen and selling euros through the New York Fed.

The Foreign and International Monetary Authorities Repo Facility (FIMA) was established during the pandemic panic of 2020 and made permanent in 2021. It allows foreign central banks to temporarily hand over their US Treasury holdings to the Fed for dollars. Bessent wants the facility's $60 billion per-institution cap raised, saying 'We should encourage it to be upsized in the coming months.'

This move would help Japan get its necessary dollars without flooding the market with supply and pushing bond prices down. The expansion of FIMA could represent a structural shift in how dollar liquidity is distributed globally.