US Defends 'Nominal' Yen Intervention as Japan Deploys Record Amounts

Treasury Secretary Scott Bessent defended the US's coordinated intervention to support Japan's currency, calling it 'nominal'. The operation aimed to strengthen the yen, which benefits American exports and reduces pressure on Japan to sell US assets. In a recent testimony at the House Financial Services Committee, Bessent stated that a stronger yen means the Japanese government won't need to intervene by selling dollars or likely US Treasuries.

The intervention occurred on July 31 when the Treasury joined Japan in buying yen after its value plummeted to its lowest level in four decades. The Treasury's involvement is estimated to be less than $1 billion, significantly lower than Japan's record expenditure of $96.4 billion from late July to late August.

Bessent suggested that the US's modest intervention was enough to signal support for Japanese policy. He also revealed that the Treasury made tens of millions of dollars on the yen operation, although this wasn't the primary goal.