Yen Intervention Sparks Global Market Worries Amid Bessent's Warning

U.S. Treasury Secretary Scott Bessent defended Washington's decision to intervene in the yen market, warning that disorderly currency moves could destabilize global markets and raise borrowing costs for U.S. households and businesses.

The intervention, carried out jointly with Japan on July 31, aimed to prevent a selloff in the yen and Japanese government bonds from spilling over into global markets.

The yen has recovered from its 40-year low near 164 per dollar reached last month but weakened back toward 160 after surging to 155.20 shortly after the intervention.

Bessent used the Exchange Stabilization Fund (ESF) to stabilize the currency, citing a similar instance in Argentina where Treasury used the fund to prevent a broader regional crisis.