US Senator Elizabeth Warren asks Treasury Secretary Scott Bessent to justify the Trump administration's Yen intervention

Senator Elizabeth Warren has urged Treasury Secretary Scott Bessent to justify the Trump administration's intervention in the yen market. In a letter dated August 13, Warren questioned the administration for not providing a detailed justification for the intervention or disclosing the amount of taxpayer-funded funds used to purchase yen.

Bessent confirmed that the first US-Japan joint intervention to support the yen since 1998 took place following the July 31 actions but did not specify the amount used. The Treasury's Exchange Stabilization Fund (ESF) was reportedly used in the operation, with euros from the ESF being employed. Warren asked Bessent to provide a legal analysis of the Treasury's use of the ESF and has requested a response by August 28.

She also sought information on the expected cost to US taxpayers, the scale of US financial support, and the conditionality of the support for Japan. In a previous instance of using ESF funds, Bessent intervened in the Argentine peso market to support President Javier Milei, which Warren criticized as a "politically driven, taxpayer-backed bailout."

Warren also inquired about whether the Treasury consulted with the European Central Bank regarding the use of euros in the yen operation, noting that the ECB was reportedly informed after the fact. The senator further questioned how Japanese financial market turmoil could impact US jobs, wages, and financial stability, given that Japan is the largest foreign holder of US Treasuries.

Analysts have speculated that the intervention by Bessent aimed to prevent Japanese sales that could have led to higher US yields.