US Treasury Defends Yen Intervention Citing Interest Rate Risks

Treasury Secretary Scott Bessent defended the US government's decision to support the yen in late July, stating that extreme volatility could lead to higher US interest rates.

In an Aug. 27 letter responding to Democratic Senator Elizabeth Warren’s inquiry, Bessent cited Japan as a major holder of US Treasuries, which could be affected by disorderly yen markets.

Bessent emphasized that the Treasury followed its Exchange Stabilization Fund statute in taking this action, and noted that 'no credit was extended to Japan.'