RismadarVoice Reporters
August 29, 2026
U.S. Treasury Secretary Scott Bessent has warned that unstable movements in the Japanese yen could trigger market disruptions capable of affecting the global financial system.
Bessent said disorderly declines or sharp fluctuations in the yen could lead to “forced unwinds” of financial positions, creating risks that may increase borrowing costs for American households and businesses.
The Treasury Secretary made the comments in a letter dated August 27 and later shared on his X account, responding to questions from Democratic Senator Elizabeth Warren over Washington’s involvement in a joint currency intervention with Japan.
The warning came as the yen resumed weakening against the U.S. dollar despite expectations that the Bank of Japan could raise interest rates in the near future.
Japan and the United States carried out a rare joint yen-buying intervention on July 31, as both countries sought to prevent a major decline in the yen and Japanese government bonds from spreading into wider global markets.
Although the currency recovered from a 40-year low near 164 yen per dollar reached last month, it later weakened again toward the 160 level after an initial rise following the intervention.
Bessent explained that the U.S. Treasury carried out the intervention by exchanging foreign currency assets from its Exchange Stabilisation Fund for yen.
He compared the move to previous efforts involving Argentina, where the fund was used to provide financial support and prevent a broader regional crisis.
“The best-managed crisis is the one that never happens,” Bessent said, defending the decision to intervene in the currency market.
The Exchange Stabilisation Fund is an emergency reserve managed by the U.S. Treasury to support foreign exchange and financial market stability.
Market participants continue to monitor movements in the yen, interest rate expectations and possible actions from central banks as concerns remain over currency volatility and its wider economic impact.
