Following President Donald Trump, U.S. Treasury Secretary Scott Besant has officially confirmed the joint currency intervention by the United States and Japan in the foreign exchange market. He stated that further intervention could occur if the yen continues to weaken.
On August 2, Besant wrote on X (formerly Twitter), "The coordinated action in the foreign exchange market last Friday was aimed at addressing the yen's erratic movements," adding that the Trump administration aims to provide tangible results to trusted partners. He emphasized, "Economic security is national security, and the U.S.-Japan alliance is built on these two foundations."
Besant explained that the U.S. Treasury is closely monitoring market conditions in communication with officials from Japan's Ministry of Finance and the Bank of Japan. He stated, "We will not hesitate to participate in additional joint interventions if necessary."
On July 31, the U.S. and Japan intervened in the foreign exchange market by purchasing yen to prevent a sharp decline in its value. This marks the first joint market intervention by the two countries since the aftermath of the Great East Japan Earthquake in 2011.
Recently, the yen-dollar exchange rate surged to around 164 yen per dollar, reaching its highest level in nearly 40 years. Following news of the intervention by Japanese authorities and U.S. participation, the rate fell to the 157 yen range, indicating a strengthening of the yen.
Besant also proposed expanding the Federal Reserve's Foreign and International Monetary Authorities (FIMA) Repo Facility, stating, "The FIMA Repo Facility is an important safety net," and recommended increasing its scale in the coming months.
The FIMA Repo Facility allows foreign central banks to use U.S. Treasury securities as collateral to obtain dollars from the Fed. This enables Japan to secure the dollar liquidity needed for yen purchases without having to sell its U.S. Treasury holdings in large quantities. From the U.S. perspective, this helps prevent a sharp decline in Treasury prices and market instability.
Besant expressed strong support for Japan's decisive market and monetary policy actions to correct the yen's significant undervaluation. This is interpreted as backing for further interest rate hikes by the Bank of Japan and the government's intervention in the foreign exchange market.
He also gave a positive assessment of Japanese Prime Minister Sanae Takaiichi's economic policies, stating, "The Takaiichi administration is entering an interesting new phase of Abenomics," and noted that the robust stimulus measures over the past 15 years have created sustainable and solid economic conditions.
This confirmation of joint intervention by both Secretary Besant and President Trump underscores the collaborative efforts between the U.S. and Japan. Trump stated to reporters that the intervention was conducted because the U.S. has a "good relationship" with Japan.
* This article has been translated by AI.
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