Treasury Secretary Scott Bessent has directed US financial authorities to undertake a historic intervention in the yen market, according to documents and reports from multiple sources. A Reuters photograph shows a Treasury to-do list that includes a proposal to buy between $5 billion and $10 billion worth of Japanese yen, marking the first such US intervention in foreign currency markets in years.
The Treasury has warned major banks that it might intervene in the dollar-yen exchange rate, according to reports. The intervention appears designed to help Japan reverse months of yen losses against the dollar. The Federal Reserve is also participating in the coordinated effort, according to Bloomberg.
The yen has weakened significantly in recent months, creating economic pressure for Japan as the currency's decline makes imports more expensive and complicates monetary policy decisions for the Bank of Japan. Currency intervention by the United States represents a significant shift in policy, as such actions have been rare in recent decades. The last major US intervention in currency markets occurred in 2011, when authorities acted to weaken the yen after it strengthened following the earthquake and tsunami.
The scale of the proposed intervention, up to $10 billion, would be substantial but represents only a small fraction of daily trading volumes in the currency markets, where trillions of dollars change hands each day. The effectiveness of currency interventions depends partly on whether they are coordinated among multiple countries and whether they align with underlying economic fundamentals.
The move comes as central banks worldwide navigate complex economic conditions, balancing domestic policy goals with international currency dynamics. For Japan, a weaker yen has provided some export advantages but has also raised costs for consumers and businesses that rely on imported goods and energy. The intervention signals closer coordination between US and Japanese financial authorities on exchange rate policy.