Bessent Pushes for FIMA Repo Expansion Amid Japan's Yen Defense Efforts

US Treasury Secretary Scott Bessent has called for an expansion of FIMA repo, drawing market attention to this key tool for Japan's yen defense.

FIMA repo allows foreign central banks and monetary authorities to borrow dollars from Federal Reserve Banks against US Treasuries, with a borrowing limit of $60 billion per institution per day.

This facility can be used by Japan to raise dollars instead of selling its Treasury holdings outright, which would put heavy pressure on the US Treasury market.

Bessent has described FIMA repo as an important backstop for Japan's yen defense and argued that it should be expanded in the coming months.