U.S. Treasury Secretary Scott Bessent said Washington will do “whatever it takes” to help Japan stabilize the yen after the two countries jointly intervened in currency markets last week. Speaking to CNBC, Bessent said the yen remains significantly undervalued and warned that continued weakness could trigger broader economic problems and encourage competitive currency devaluations. Following his remarks, the yen recovered slightly after slipping against the U.S. dollar.
Bessent also welcomed Japan’s plan to use the Federal Reserve’s Foreign and International Monetary Authorities (FIMA) Repo Facility, which allows key central banks to access dollar liquidity. He suggested the Fed could consider expanding the program to help reduce market volatility while protecting the U.S. economy. He added that U.S. sales of euros to support the intervention were simply a reallocation of resources and did not signal concerns about the euro.
Former Treasury Secretaries Timothy Geithner and Henry Paulson said coordinated intervention could be effective if backed by broader economic policies, including potential interest rate hikes in Japan. Paulson added that supporting Japan also serves U.S. interests by reducing the likelihood that Japan would need to sell its large holdings of U.S. Treasury bonds.
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