US Treasury Defends Yen Intervention as Transparency Concerns Intensify

Treasury Secretary Scott Bessent has come under fire for his response to Senator Elizabeth Warren's inquiry about the US government's intervention in the yen market. The exchange began with Warren's letter on August 13, which sought details on the Treasury's decision to sell euros from the Exchange Stabilization Fund and buy yen after Japan's currency hit a 40-year low.

Bessent defended the intervention as necessary to prevent disorder in the yen from destabilizing global markets and lifting US borrowing costs. However, his response left several of Warren's questions unanswered, including how much yen was purchased, the execution rate, and the current value of the position.

The dispute has raised concerns about transparency and accountability in the government's economic decision-making process. The intervention marks a rare instance of coordinated action between the US and Japan to strengthen the yen since 1998, with Japan spending a record 15.4 trillion yen (approximately $96.5 billion) supporting its currency between July 30 and August 26.

Bessent's response has been criticized for not providing sufficient information about the intervention, which has left market participants and lawmakers seeking clarity on the government's actions.