US Pledges Support for Yen Intervention Amid Undervaluation Concerns
US Treasury Secretary Scott Bessent said on August 4 that Washington will do 'whatever it takes' to support Japan's efforts to stabilize the yen. The statement came after a joint intervention by the US and Japan on July 31, where they bought Japanese currency to prop up its value.
The yen had been experiencing substantial undervaluation, which could trigger other economic problems or competitive devaluations of other currencies, according to Bessent. He stated that this situation is 'unhealthy'. The intervention was successful in raising the yen's value from 158 to the dollar on August 3 to 157.55 after his comments.
Bessent also mentioned the Foreign and International Monetary Authorities Repo Facility (FIMA), which would allow the Bank of Japan to borrow up to $60 billion to support the yen. He expressed happiness that the Japanese government wants to use this facility.