US Treasury Intervenes in Yen Market to Protect Asian Markets

US Treasury Secretary Bessent revealed in an interview that Washington helped Japan prop up the yen to protect Asian markets. Buying yen means using other currencies to push its value up, a move known as currency intervention.

Bessent told European officials that the US Treasury's euro sale was only a reserve reallocation and not market intervention. This rare case of direct support from Washington is significant because it shows how much a weak yen concerns the US government.

A weak yen is not just a Japan problem, according to Bessent. It could start a chain reaction across Asia, with other countries weakening their currencies to keep up. He cited swings in the South Korean won and worries about China's yuan being undervalued.

Washington worried about the long-term picture, as lasting yen weakness could raise Japanese inflation, strain Asian currencies, and unsettle global markets. Bessent emphasized that buying yen has limits and that Japan needs policies to address the reasons its currency keeps falling.