US Treasury Secretary Scott Bessent played a pivotal role in the recent joint US-Japan intervention to boost the Japanese yen. Bessent, who has a strong background in hedge funds and a deep understanding of Japan's position in global markets, indicated that he views the yen as undervalued. His commitment to shoring up the yen was highlighted by a Reuters photo showing a notepad at a cabinet meeting with a "To Do" item: "Buy Japanese Yen (JPY) $5-10 bil.
The intervention led to significant gains for the yen. On Friday, it advanced over 1% against both the US dollar and the euro, closing at 157.40 yen to the dollar, its strongest level since early May. This followed an intraday jump of more than 3% against the dollar on Thursday. Tokyo reportedly spent around 8.45 trillion yen (approximately $52.8 billion) on Thursday, marking what could be its largest single-day intervention ever.
The joint action, which marked the first such collaboration between the US and Japan since 2011, involved direct purchases of the yen, official calls to currency trading banks, and "jawboning" from both Bessent and Japanese Finance Minister Satsuki Katayama. Katayama praised Bessent as a market expert, and Japanese top currency bureaucrat Atsushi Mimura stated that Japan was receiving more than just "moral support" from Washington. This coordinated effort helped reverse months of yen losses, which had caused alarm in Tokyo due to rising import costs for businesses and consumers.
