Bessent Warns Yen Swings Could Spark Global Financial Instability

U.S. Treasury Secretary Scott Bessent has warned that disorderly swings in the Japanese yen could destabilize global financial markets and raise borrowing costs for U.S. households and businesses.

The warning comes after a rare joint currency intervention by Washington and Tokyo failed to calm markets, with the yen experiencing renewed weakening against the dollar despite expectations of interest rate hikes from the Bank of Japan.

Bessent made the comments in a letter dated August 27, which was published on X the following day. The letter responded to Democratic Senator Elizabeth Warren's request for an explanation of the joint currency intervention carried out by Washington and Tokyo in July.