US Vows to Support Yen, Warns of Unhealthy Competitive Devaluations
US Treasury Secretary Scott Bessent has reaffirmed Washington's commitment to supporting Japan in stabilizing its currency, the yen. Speaking on CNBC, he stated that the US will do 'whatever it takes' to support Japan in a way that benefits the American economy and taxpayer.
Last week, the US and Japan joined forces to buy Japanese currency as part of an intervention effort. Bessent emphasized that the substantial undervaluation of the yen could lead to other economic problems or competitive devaluations, which he deemed 'unhealthy.'
He expressed support for Japan's plan to use a pandemic-era Federal Reserve backstop facility, the Foreign and International Monetary Authorities Repo Facility, to borrow up to $60 billion to prop up the yen.
Bessent also downplayed concerns about US sales of euros to buy yen, stating that this was simply a 'reallocation of our resources.'