Bessent Vows to Repeat Yen Intervention, Calls for Fed Backstop Increase
US Treasury Secretary Scott Bessent is prepared to intervene in foreign exchange markets again to counter disorderly yen movements, and has called for an increase in the Federal Reserve's backstop for foreign central banks.
Bessent stated that he would 'not hesitate' to repeat a coordinated US-Japan intervention that took place on Friday, which was confirmed by Japan's finance ministry and President Donald Trump. This action countered yen movements that pushed the currency to new 40-year lows against the dollar last week.
The Treasury chief praised Japanese Prime Minister Sanae Takaichi's government for its 'decisive market and monetary steps' to correct the yen's undervaluation, adding that the US Treasury remains 'attentive and in close communication' with the Bank of Japan and Japan's Ministry of Finance.
Bessent also emphasized the importance of the Fed's Foreign and International Monetary Authorities lending facility, known as the FIMA Repo Facility, which allows countries to borrow up to $60 billion in US dollar loans for up to seven days. He urged that this facility be 'upsized' in the coming months.