Via newsweek.com
Bessent says US will do whatever it takes to support Japan’s yen
The Treasury secretary said further yen weakness could raise Japanese import costs and place pressure on currencies across Asia.
Treasury Secretary Scott Bessent said the US would continue supporting Japan’s efforts to stabilize the yen after the two countries jointly intervened in currency markets last week.
“We will do whatever it takes to support them in a way that helps the American economy, the American taxpayer,” Bessent said during a CNBC interview Tuesday.
Bessent said the yen’s weakness had contributed to Japan’s inflation problem by increasing the cost of imported goods, including energy. He also warned that a further decline could place pressure on other Asian currencies and lead to competitive devaluations.
The Treasury secretary cited recent volatility in the Korean won and said many market participants believe China’s renminbi remains undervalued.
The comments came after the US Treasury joined Japanese authorities in purchasing yen last week. The operation marked the first coordinated intervention involving the two countries since 2011.
The yen strengthened to approximately 155.20 per dollar after the intervention was confirmed Monday, compared with a four decade low near 164 reached in July. It weakened to around 157.7 on Tuesday as the initial rally slowed.
Bessent said intervention can send a signal to markets but must be followed by changes in monetary and fiscal policy. He expressed confidence that Prime Minister Sanae Takaichi’s government would pursue greater budget discipline and that Bank of Japan Governor Kazuo Ueda would take the necessary steps.
Japan has said it will not hesitate to conduct further coordinated intervention. Bessent said US officials remained in close contact with Tokyo but declined to prejudge whether the Bank of Japan should raise interest rates.
The US used euros from its reserves to purchase yen during the operation. Bessent said Treasury officials had contacted European central banks and finance ministers and described the transaction as a reallocation of US reserves.
Bessent also addressed a photograph showing “Buy Japanese yen” on his notepad during a cabinet meeting Friday. He said the note was intended to ensure reporters understood that JPY was the currency symbol for the yen.