US Treasury Secretary Touts Joint Currency Intervention with Japan

US Treasury Secretary Scott Bessent spoke to NHK on Tuesday about the joint intervention in the currency market last week. The US and Japan staged this intervention, which saw the Japanese currency surge more than five yen against the dollar.

Bessent described the intervention as a symbol of the bilateral alliance between the two countries. He said that the US wanted to join with its 'great Japanese allies' to show support for the Takaichi government's policies that will lead to long-term yen strengthening.

The interventions were aimed at addressing 'excessive volatility' and 'undue yen strength', which Bessent believes could harm Asia and the global economy. He also stated that the weak yen is part of the reason inflation has been ticking up in Japan.

Bessent expressed optimism about the impact of the intervention, saying that as the excess yen weakness dissipates, energy prices will come down, contributing to lower inflation rates. This, he believes, will allow Japan and the yen to enter a 'virtuous cycle'.