Overview
- Treasury Secretary Scott Bessent said the United States joined Japan in buying yen by selling other foreign currency from the Exchange Stabilization Fund and that no new credit was extended to Japan.
- Bessent publicly answered an Aug. 13 letter from Sen. Elizabeth Warren with a sharp rebuttal that called Warren’s framing incorrect and offered a blunt explanation of how the ESF transaction worked.
- The exact size of the U.S. yen purchase remains undisclosed, although a July 31 photograph of Bessent’s notepad showed a contemplated range of $5–10 billion while Japan reported heavy intervention totaling about $96.5 billion.
- Warren pressed for full disclosure and warned of possible taxpayer exposure by citing a prior $20 billion ESF use, and Democrats have pushed for more oversight because Treasury has not provided the detailed legal and execution records requested.
- Policy makers say the swap aimed to steady markets and limit spillovers that could raise U.S. borrowing costs, and the episode highlights how rare coordinated currency actions are and why transparency of ESF operations is now a political flashpoint.