Yen Slides 'Contained', Says US Treasury Secretary
Scott Bessent expects Bank of Japan to support the currency, possibly through higher interest rates, after a record $96.4 billion intervention
US Treasury Secretary Scott Bessent stated on August 30 that recent yen moves were 'pretty well contained' and not disorderly, suggesting that the Japanese currency's renewed slides were not seen as a reason for another joint Japan-US intervention.
The yen had slid below the 160-per-dollar level on August 28, prompting concerns about the currency's stability. However, Bessent expressed his expectation that the Bank of Japan will take action to support the yen, possibly through higher interest rates.
Bessent's comments came after a meeting with Bank of Japan Governor Kazuo Ueda on the sidelines of the Group of 20 finance leaders' gathering in Asheville, North Carolina. The US and Japan had conducted a rare joint intervention to support the yen on July 31, and have agreed to continue their coordinated effort to achieve 'orderly' moves in the yen.
Japan has spent a record $96.4 billion over the past month to support the currency, and the Bank of Japan is widely expected to raise rates at its next policy meeting in September. Bessent called for the Bank of Japan to respond through higher interest rates as inflationary pressures continue to build.
## Why it matters The yen's stability is crucial for the global economy, and any disorderly moves could have significant implications for trade and investment. The US and Japan's coordinated effort to support the yen reflects the importance of maintaining stability in the currency markets. With the Bank of Japan expected to raise rates in September, the yen's trajectory will be closely watched by investors and policymakers alike.
