2 days ago
Bessent’s Market Interventions Face Doubts as Yen Stays Weak
Scott Bessent is trying to influence the value of currencies and the cost of government borrowing.
He wants the Japanese yen to become stronger and the US dollar to become weaker.
He also wants long-term US interest rates to be lower.
The United States and Japan bought yen, but the amounts were small compared with the enormous global currency market.
The US Treasury also plans to buy more long-term government bonds.
The author says these actions have not changed markets very much.
The yen is still weak, and long-term bond rates have mostly gone back to where they were.
The article argues that markets are too large and powerful for small interventions to control them easily.
US Treasury Secretary Scott Bessent reportedly supported a yen intervention with Japan on July 31.
The United States may have spent $5–10 billion, while Japan reportedly contributed $53 billion.
Bessent also announced larger buybacks of long-term US Treasury bonds, potentially totaling $32 billion quarterly.
The article argues these interventions are tiny compared with the foreign-exchange and Treasury markets.
The yen remains weak and long-term bond yields have largely returned to pre-announcement levels, according to the article.
- Who
- US Treasury Secretary Scott Bessent, the US Treasury, and Japan’s finance ministry.
- What
- They intervened in currency markets to support the yen and announced measures involving long-term US Treasury bonds.
- Where
- The measures involved the foreign-exchange market and US Treasury market, with cooperation between the United States and Japan.
- When
- The yen intervention occurred on July 31, and the bond-buyback announcement followed a few weeks later; the article is dated 2026.
- Why
- Bessent sought a stronger yen, a weaker dollar, and lower long-term US interest rates.
Intervention skeptics
Bessent’s policy aims
Ability to move markets
Intervention skeptics
The author argues that the interventions are too small to significantly affect the enormous foreign-exchange and Treasury markets.
Bessent’s policy aims
Bessent’s actions indicate that targeted purchases and debt-management changes could influence exchange rates and long-term financing costs.
Currency intervention
Intervention skeptics
The article says the Plaza and Louvre Accords did not reliably cause major currency-market reversals and warns against repeating that approach.
Bessent’s policy aims
The United States and Japan intervened to support a weaker yen, reflecting a belief that coordinated action can help influence currency conditions.
Bond-market strategy
Intervention skeptics
The author says the buybacks have produced little lasting change in long-term bond rates.
Bessent’s policy aims
The Treasury’s willingness to buy more long-term bonds and issue more short-term securities may signal a shift intended to reduce longer-term borrowing costs.
Key facts
- Foreign-exchange turnover
- Over-the-counter foreign-exchange trading reached $9.6 trillion per day in April 2025, according to the Bank for International Settlements.
- US Treasury market
- The US Treasury market is valued at $31.5 trillion and averages about $1.2 trillion in daily trading, according to the article.
- Estimated US yen intervention
- A photograph of Bessent’s to-do list suggested the United States spent $5–10 billion.
- Reported Japanese contribution
- Japan reportedly contributed another $53 billion to the yen-support effort.
- Planned bond buybacks
- The increased long-term Treasury buybacks could amount to about $32 billion per quarter.
- Market response
- The article says the yen remained weak and long-term bond rates largely returned to pre-announcement levels.
Sources
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