Bessent's Yen Intervention: Will it Boost Korean Won and Global Markets?
US Treasury Secretary Scott Bessent has been openly intervening in foreign exchange and bond markets to steer a stronger yen and a weaker dollar. This is part of his efforts to ease the debt burden of US Treasuries on the back of AI-driven economic growth.
The Korean won, which surged into the low 1,300-won range per dollar in July and August, has seen its upward momentum slow down. In contrast, the Japanese yen is projected to appreciate relatively faster amid the possibility of a rate hike in Japan.
According to Bessent, he has 'asymmetric information' that allows him to make informed decisions about market interventions. He even went so far as to flash a handwritten note reading 'buy yen' on television news cameras, which was seen as an attempt to stimulate bets on yen appreciation.