Aug 4 - U.S. Treasury Secretary Scott Bessent said the Trump administration stands ready to do "whatever it takes" to support Japan’s efforts to stabilize the yen, emphasizing that any assistance would be provided in a manner that protects the American economy and taxpayer.
Speaking in an interview on CNBC, two days after confirming that the U.S. Treasury had joined Japan’s finance authorities in a joint intervention last week to prop up the yen, Bessent warned that the yen’s marked undervaluation could spark broader economic problems or prompt competitive currency devaluations - developments he described as "unhealthy."
Bessent did not outline the specific mechanics of how the United States participated in the intervention on Friday. He said, however, that he welcomed Japan’s interest in using a Federal Reserve backstop created during the COVID era for key central banks - the Foreign and International Monetary Authorities Repo Facility, known as FIMA.
The FIMA facility would allow the Bank of Japan to borrow up to $60 billion to help support the yen. Bessent noted that the facility was established in 2020 when the size of the market for those bonds was smaller, and suggested it would be reasonable for the Federal Reserve to consider increasing the facility’s size. He framed the facility’s purpose as protecting the U.S. economy and keeping volatility offshore.
On the topic of U.S. reserve movements, Bessent discussed sales of euros to buy yen, saying he had been in close contact with European partners including central banks. He said he reassured those partners that the transactions represented a reallocation of U.S. reserves, adding that "the euro is much closer to an equilibrium price." He declined to prescribe where the euro should trade, returning the focus to what he characterized as the "substantial undervaluation of the yen here and the policies that the Takaichi government is putting in place to change that."
Bessent also commented on a widely circulated photograph of his Friday to-do list, which contained the entry "Buy Japanese yen (JPY) $5-10 bil." He said, "I just wanted to make sure that all the reporters looking on over my shoulder also knew the symbol JPY for the Japanese yen."
He punctuated the remark with an anecdotal aside about items he considered adding to the list, joking that he thought about including "go and have lunch with the (Iranian) supreme leader, play tennis with Putin, you know. But I thought I would just leave it at the buy five to 10 billion (dollars) of Japanese yen."
Context and implications
Bessent’s remarks confirm U.S. involvement in last week’s coordinated effort to support the yen and underscore Washington’s willingness to deploy policy tools - including potential adjustments to the FIMA facility - to limit spillovers to the U.S. economy. He stressed that actions taken would aim to help Japan while protecting U.S. taxpayers.
While he spoke to coordination with European partners over reserve reallocations, he refrained from detailing the operational steps of the intervention and avoided taking a position on where the euro should trade, instead reiterating concern over the yen’s undervaluation and the measures the Takaichi government is pursuing to address it.