Overview
- Japan and the United States carried out a joint yen-buying operation around July 31 that used euros sold by the New York Fed to buy yen as part of a coordinated effort to steady the currency.
- Treasury Secretary Scott Bessent said the U.S. action converted existing Exchange Stabilization Fund foreign-currency assets into yen and did not extend credit to Japan, so Japan owes no repayment.
- Bessent publicly rebuked Sen. Elizabeth Warren for pressing for fuller disclosure, using sharp personal language while declining to reveal the exact U.S. purchase size, the execution rate, or counterparties.
- Japan reported roughly $96.4–$96.5 billion in FX intervention from July 30 to Aug. 26, while the yen has only partly held its initial gains and has moved back toward the roughly ¥160 per dollar level.
- Lawmakers and analysts say the episode raises oversight and transparency questions about the ESF and coordination with other central banks, and officials warn that renewed yen disorder could force asset selloffs and raise U.S. interest costs.