US Treasury Backs Japan's Yen Intervention with Up-to-$60 Billion Lifeline

Treasury Secretary Scott Bessent announced that the Trump administration will do 'whatever it takes' to support Japan's effort to stabilize its currency, the yen.

Bessent made the statement on Tuesday, two days after confirming the Treasury had joined Japan's finance authorities in an intervention last week to prop up the yen. The US Treasury chief said that the yen's substantial undervaluation could trigger other economic problems or competitive devaluations of other currencies 'which is unhealthy.'

Bessent did not discuss the mechanics of US participation in the joint intervention, but expressed support for Japan using a COVID-era Federal Reserve backstop to borrow up to $60 billion to support the yen. He also stated that the purpose of this facility was to 'protect the U.S. economy and keep any volatility offshore.'

Bessent assured European partners, including central banks, that US sales of euros to buy yen were simply a reallocation of reserves. He emphasized that the euro is closer to an equilibrium price than the yen.