‘Buy $5-10 billion yen’: Bessent’s ‘to-do’ note hints at US plan to back Japanese currency

The latest addition to the United State’s to-do list is Japanese currency, yen.Signs that Washington was preparing to back Japan’s currency came to light on Friday after a photograph from US President Donald Trump’s cabinet meeting at Camp David showed US treasury secretary Scott Bessent weighing purchases of between $5 billion and $10 billion worth of yen.The Reuters photograph, taken during an on-the-record portion of the meeting, showed Bessent’s notepad carrying the underlined heading “To Do” and a single entry reading: “Buy Japanese Yen (JPY) $5-10 bil.” The image was taken at 11:33 ET (1533 GMT), with Bessent’s name card visible on the conference table directly above the notepad.The image followed come after reports that the US treasury had informed several banks it could intervene in the yen market on Friday and that they should “stand ready for future action.”Japanese authorities had already stepped in to support yen earlier, intervening in Tokyo and driving a sharp rise in the currency during morning trading. The yen strengthened further later in the day, with LSEG data showing the dollar slipping from around 158.9 yen at 4:14 p.m. EDT (2014 GMT) to roughly 157.6 yen just before 5 pm EDT (2100 GMT), a fall of about 0.8%.Joint interventionThe Financial Times also reported that the US had intervened alongside Tokyo to support the yen, describing it as Washington’s first intervention in support of Japan’s currency in more than a decade.According to the report, the Federal Reserve Bank of New York sold euros to purchase yen on behalf of the treasury through Goldman Sachs and Morgan Stanley. Citing people familiar with the matter, the newspaper said it did not identify the amount of yen that was bought.If confirmed, the reported operation would mark the first time since 2011 that the US treasury directly supported the yen. That year, it joined other G7 countries in a coordinated market operation following the earthquake and tsunami in Japan.Japan steps up currency defenceSeparate central bank data released on Friday indicated Japan may have sold as much as $58.97 billion to buy yen on Thursday, pointing to repeated efforts to support the currency.Japan’s efforts to stem the yen’s weakness have gathered pace in recent months, with the currency seeing sharp gains after repeated intervention measures. On Thursday, the yen climbed suddenly against the dollar during New York trading hours after what market sources said was official yen buying, coordinated with intervention by South Korea. The move pulled the currency away from near four-decade lows and delivered its biggest one-day gain against the dollar in almost two years. It followed around $70 billion in interventions carried out in April and May.On July 30, the yen strengthened by more than 3% to 157.8 per dollar, just a week after touching a near 40-year low of 163.99. The rally came after repeated warnings from Japanese authorities that intervention could come without notice, while a market source in South Korea said the country was selling dollars alongside Japan.Earlier, on April 30, the yen had jumped as much as 3% to 155.5 per dollar after weakening to 160.72, its weakest level since July 2024.