Disorderly Yen Markets May Boost U.S. Borrowing Costs

U.S. Treasury Secretary Scott Bessent warned in a letter to U.S. Sen. Elizabeth Warren that disorderly movements in the yen market could lead to higher borrowing costs for American families and businesses.

The warning came after the U.S. currency authorities' intervention in late July, where they allegedly sold euros and bought yen. However, Bessent did not disclose details such as the scale of yen purchases.

In the letter, Bessent stated that 'disorderly yen markets can trigger forced unwinds, which could destabilize global markets and ultimately raise borrowing costs for American families and businesses.'

The dollar topped 160 yen for the first time in about a month in New York trading on Friday as expectations for an early interest rate hike by the U.S. Federal Reserve increased.