US Vows Unwavering Support for Japan's Yen Stabilization Efforts
US Treasury Secretary Scott Bessent has said that Washington will do 'whatever it takes' to support Japan's efforts to stabilize the yen. The US joined forces with Japan on July 31 to buy the Japanese currency, and Bessent emphasized that this intervention is aimed at helping the American economy.
Bessent noted that the yen's substantial undervaluation could trigger other economic problems or competitive devaluations of other currencies, which he deemed 'unhealthy'. The Treasury chief did not disclose the mechanics of US participation in the joint intervention with Japan but mentioned that the Japanese government is considering using a pandemic-era Federal Reserve backstop for key central banks.
Regarding US sales of euros to buy yen, Bessent stated that he had reassured European partners, including central banks, that the US move was merely a 'reallocation of our resources'. He also expressed confidence in the stability of the euro, which is closer to its equilibrium price.