US Ready for More Joint Intervention to Support Yen, Says Treasury Secretary Bessent

U.S. Treasury Secretary Scott Bessent stated Sunday that Washington is prepared to engage in further coordinated foreign exchange interventions with Tokyo should the Japanese yen continue to experience disorderly movements. The remarks underscore a strengthened commitment between the two allies to stabilize the currency after its recent plunge.

Washington Reaffirms Support

In a post on the social media platform X, Bessent said that last Friday's joint U.S.-Japan intervention was effective in curbing "disorderly fluctuations in the yen." He confirmed that the Treasury Department remains in close communication with Japan's Ministry of Finance (MOF) and the Bank of Japan (BOJ).

"We will not hesitate to participate in further joint intervention," Bessent wrote. He also noted the Treasury's support for expanding the Federal Reserve's FIMA repo facility for foreign and international monetary authorities, calling it an important liquidity backstop.

Market Impact and Context

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The statement follows Japan's confirmation that it conducted its first joint, coordinated intervention with the U.S. since 2011 to prop up its currency. The move was triggered by the yen's sharp depreciation to a 40-year low against the U.S. dollar.

The intervention prompted a significant rebound for the yen. The USD/JPY currency pair, which moves inversely to the yen's strength, fell nearly 4% last week. As of early Monday trading, the pair stood at approximately 157.71.

Monetary Policy Backdrop

The currency market actions come as the Bank of Japan navigates its own policy path. On Friday, the BOJ kept its short-term interest rates unchanged but signaled that it is prepared to implement further rate hikes if core inflation remains persistently strong. This monetary policy divergence between Japan's low rates and higher rates in the U.S. has been a primary driver of the yen's long-term weakness.