US Treasury Vows Unwavering Support for Japan's Currency Intervention

US Treasury Secretary Scott Bessent has assured that his administration will take all necessary measures to support Japan's efforts to stabilize its currency. In an interview with CNBC, Bessent stated that the US will do 'whatever it takes' to help Japan in a way that benefits the American economy and taxpayers.

The Treasury Secretary noted that the yen's significant undervaluation could lead to other economic problems or competitive devaluations of other currencies, which he described as 'unhealthy'. Bessent also mentioned that the US had joined Japan's finance authorities in an intervention last week to prop up the yen, but did not disclose any details about the mechanics of this joint effort.

Bessent expressed his support for Japan's use of a COVID-era Federal Reserve backstop, the Foreign and International Monetary Authorities Repo Facility (FIMA), which allows the Bank of Japan to borrow up to $60 billion to support the yen. He also emphasized that the US is in close contact with European partners, including central banks, regarding their sales of euros to buy yen.