Unstable Yen Could Trigger Higher US Borrowing Costs, Bessent Warns

Treasury Secretary Scott Bessent warned that an unstable yen could lead to higher borrowing costs for Americans. This comes after the United States and Japan coordinated a market intervention to prop up the yen last month.

The joint operation aimed to stabilize global markets, which had been disrupted by excessive yen depreciation. The Treasury Department revealed that it swapped existing foreign-currency assets within the Exchange Stabilization Fund for yen without disclosing the scale of the purchases.

Bessent emphasized that Japan is a major holder of U.S. Treasuries and a critical trading partner, making an unstable yen market a significant concern. He noted that disorderly yen markets can trigger forced unwinds, which could have far-reaching consequences for global financial stability.