The United States intervened in currency markets this past Friday, July 31, selling euros from its international reserves and buying the Japanese yen. Secretary of the Treasury Scott Bessent confirmed the details of the effort on Monday, August 3, telling CNBC that the United States bought yen alongside Japan to curb currency volatility and reduce risks to Asian markets. He added that intervention can send a market signal, but Japan also needs to deliver policies that support the currency.
“A stable yen is not only important for the U.S., but very important for the entire region,” Bessent said.
The yen spiked against the dollar following the announcement. The coordinated effort marked the first time the United States has staged a currency intervention for Japan since 2011, and it came weeks after the yen hit a forty-year low last month. “We’re always there for Japan,” U.S. President Donald Trump told reporters on Air Force One on Sunday, August 2.
CFR’s Whitney Shepardson Senior Fellow Brad W. Setser—who worked on currency policy when he served as deputy assistant secretary at the U.S. Department of Treasury—broke down how unusual the move was and what could be in it for Washington.
Why the U.S. Intervened to Prop Up Japan’s Yen | Council on Foreign Relations
(source: Brad W. Setser – Council on Foreign Relations)
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