U.S. Treasury took steps to weigh yen intervention after market turmoil

The U.S. Treasury took preliminary steps toward intervening in currency markets after Treasury Secretary Scott Bessent expressed concern that recent turmoil in Japan could spill over to the United States, and the Federal Reserve Bank of New York asked banks about the cost of exchanging yen for dollars, according to the report.

The New York Fed’s inquiries, made on behalf of the Treasury, were an unusual move that signaled to traders the possibility of a large-scale purchase of yen. Though the Treasury did not ultimately intervene, the prospect helped lift the yen about 1.6 percent against the dollar, its sharpest gain in almost six months.

The article says the yen had weakened about 13 percent since April while Japanese borrowing costs rose, and that Mr. Bessent blamed a rise in Japanese bond yields for driving up U.S. government borrowing costs. It also notes the Trump administration’s focus on lowering yields on U.S.

Treasuries to improve affordability and that some analysts were puzzled by the move; Ed Al-Hussainy called such intervention “highly unusual” and said fears of spillover into Treasuries were “pretty unfounded.” The Treasury Department and the White House did not respond to requests for comment.

Key Topics

Business, U.s. Treasury, Scott Bessent, Japanese Yen, New York Fed, Exchange Stabilization Fund