US Ready to Help Stabilize Japanese Currency

US Treasury Secretary Scott Bessent said President Donald Trump's administration will do whatever is necessary to help Japan stabilize the yen in a way that also benefits the US economy and American taxpayers.

Bessent made the remarks two days after confirming that the US Treasury, together with Japanese authorities, had intervened in the currency market to support the yen last week. He said the Japanese currency remains significantly undervalued, raising the risk of further economic disruption and competitive currency devaluations.

He also backed continued use of a Federal Reserve facility introduced during the COVID-19 pandemic that allows the Bank of Japan to borrow up to $60bn to support the yen. Bessent suggested the limit could be increased in light of the expansion of the bond market.

Regarding the sale of euros to purchase yen, Bessent said European partners, including central banks, had been informed in advance. He described the operation as a reallocation of foreign exchange reserves and said the euro was trading closer to its fair value than the Japanese yen.

(Reuters, bak)