Bessent Seeks Fed Help to Defend Yen Through FIMA Boost

Treasury Secretary Scott Bessent has made an unusual request to the Federal Reserve to increase funding for the Foreign and International Monetary Authorities Repo Facility (FIMA), which allows foreign governments, including Japan, to access dollars using their Treasury holdings as collateral. This move comes after the US Treasury joined forces with Japan to prop up the yen.

Bessent praised FIMA on Sunday, highlighting its role in supporting the Japanese currency. The facility has been used by Japan and other countries to stabilize their currencies and maintain access to dollars.

The call for increased funding from Bessent puts renewed attention on the ties between the US Federal Reserve and foreign central banks, which typically operate independently. This unusual move may indicate a closer relationship between the two institutions in responding to currency market fluctuations.