Bessent says disorderly yen moves can destabilize global markets

U.S. Treasury Secretary Scott Bessent warned on August 29 that disorderly yen movements could disrupt global markets, potentially raising borrowing costs for American residents and companies. This came in response to a request from Senator Elizabeth Warren for clarification on Washington's joint effort with Japan to stabilize the yen last month.

The comment was made in a letter posted on Bessent's X account the following day. Despite initial hopes that the Bank of Japan might raise interest rates soon, the yen has since weakened again against the dollar, dropping towards 160 per dollar after reaching a 40-year low near 164 earlier in the month. The intervention involved the Treasury exchanging assets in its Exchange Stabilization Fund (ESF) for yen, a similar approach previously taken during Argentina's financial crisis. Bessent defended the move, stating it prevents crises from becoming larger regional issues.