Bessent Says a ‘Disorderly Yen’ Could Ultimately Raise US Rates

Live updates

1. 14d ago

   Bessent Warns Yen Volatility Could Increase US Borrowing Costs

   Treasury Secretary Scott Bessent warns that disorderly moves in the yen risk destabilizing global markets by triggering forced unwinds of positions. He states these market disruptions could ultimately raise borrowing costs for American businesses and households. This warning follows a joint currency intervention with Japan in late July. Meanwhile, US 10-year Treasury yields have reached their highest levels since January 2025, driven by a global bond selloff and rising oil prices that have revived inflation fears.

   Why it matters

   The US recently conducted its first yen purchase in 28 years using the Exchange Stabilization Fund. Japan spent between $96.5 billion and $98.7 billion over a one-month period to support its currency. These actions aim to prevent extreme volatility that could spill over into other financial sectors.

   What is confirmed

   • Treasury Secretary Scott Bessent says disorderly yen moves can trigger forced unwinds that risk destabilising global markets.
   • Bessent states yen volatility could raise borrowing costs for US households and businesses.
   • US 10-year Treasury yields reached their highest level since January last year.

   Still unconfirmed

   • US gasoline averaged $4.08 as President Trump summoned refiners to the White House.
   • Japanese and European bonds are sliding due to fiscal worries.

   What to watch next

   • Further joint currency interventions between the US and Japan
   • Federal Reserve responses to rising Treasury yields and inflation fears
   Sources used for this update (4)

   1. www.thestar.com.my — Bessent says disorderly yen moves can destabilise global markets
   2. en.sedaily.com — Trump Presses Refiners, Fed as Gasoline Prices Surge Before Midterms
   3. www.themountaineer.com — Election 2026: Cooper headliner fails on currency asset exchange, Bessent says
   4. en.sedaily.com — Global Bond Selloff Deepens as Oil Surge Revives Inflation Fears
   confidence 90%
2. 17d ago

   Treasury Secretary Bessent Warns Yen Volatility Could Raise US Borrowing Costs

   Treasury Secretary Scott Bessent defended a late July joint currency intervention with Japan, warning that disorderly yen markets could trigger forced unwinds and destabilize global financial markets. Bessent stated such volatility could ultimately raise borrowing costs for American families and businesses. To support the yen, Japan spent a record amount over the past month, with estimates ranging from $96.5 billion to $98.7 billion. The US intervention marked the first time in 28 years the US bought yen, utilizing the Exchange Stabilization Fund by exchanging foreign-currency assets for yen.

   Why it matters

   The US and Japan formed a currency alliance to prevent a sharp drop in the yen. This move aims to mitigate spillover risks to the global economy and US interest rates. The intervention has drawn scrutiny from US Senator Elizabeth Warren.

   What is confirmed

   • Treasury Secretary Scott Bessent warned that disorderly yen markets could lead to higher borrowing costs for US businesses and families.
   • The US intervened in currency markets with Japan in late July to prevent a sharp drop in the yen.
   • This action marked the first time in 28 years the US bought yen.
   • Japan spent a record amount to support the yen over the past month, with reports citing either $96.5 billion or $98.7 billion.
   • Bessent stated the US Treasury exchanged existing Exchange Stabilization Fund foreign-currency assets for yen.
   • Bessent claimed that extreme volatility in the Japanese currency could feed through to higher US interest rates.

   Still unconfirmed

   • US authorities intervened by selling the euro to buy the yen.
   • Gold prices may hit $15,000 by December.

   What to watch next

   • Disclosure of the exact scale of US yen purchases
   • Further responses from Senator Elizabeth Warren regarding the Treasury's intervention
   • Data on whether yen volatility has impacted US borrowing costs
   Sources used for this update (15)

   1. WSJ — Japan Spent Record $98.7 Billion to Prop Up Yen in Joint Move With U.S.
   2. Bloomberg.com — Bessent Says a ‘Disorderly Yen’ Could Ultimately Raise US Rates
   3. Reuters — Japan spent record $96.5 billion to support yen over past month, ministry data shows
   4. Investing.com — Breaking down the U.S.-Japan “currency alliance”
   5. CNBC — Bessent attacks Warren over yen intervention query, offers ‘Foreign Exchange for Dummies’ lesson
   6. New York Post — Exclusive | Treasury secretary blasts Elizabeth Warren, offers her ‘Foreign Exchange for Dummies’ tutorial
   7. finance.yahoo.com — Bessent Says a ‘Disorderly Yen’ Could Ultimately Raise US Rates
   8. en.bloomingbit.io — Why the US Bought Yen for the First Time in 28 Years: Bessent Says Move Was to Prevent Higher Rates
   9. cryptobriefing.com — Disorderly yen may lead to higher US rates, impact gold prices: Bloomberg
   10. www.econotimes.com — Bessent Defends US Yen Intervention Over Treasury Market Risks
   11. finance.yahoo.com — Bessent defends yen support, cites US borrowing cost risks
   12. jen.jiji.com — Disorderly Yen Markets Could Raise U.S. Borrowing Costs: Bessent
   confidence 95%