U.S. Assists Japan in $97 Billion Yen Stabilization Effort
The U.S. Treasury, under Secretary Scott Bessent, clarified that it did not lend money to Japan but instead used the Exchange Stabilization Fund (ESF) to buy yen as part of a coordinated intervention effort aimed at stabilizing the currency. This approach avoids creating debt obligations and reduces default risk for taxpayers. The ESF held $2.57 billion in yen by June 30, allowing it to swap euros into additional yen holdings without congressional approval. Japan announced that its interventions totaled approximately ¥15.4 trillion ($97 billion) between July 30 and August 26, meeting a deadline set by Senator Elizabeth Warren who had raised concerns about potential losses for U.S. taxpayers if Japan failed to repay. Bessent emphasized there is no repayment risk since the transaction was an asset swap rather than a loan. The intervention has already seen some of its gains erode as the yen weakened further, trading at 160.17 per dollar compared to the rate achieved during the operation.
Topics: Elizabeth Warren Exchange Stabilization Fund Treasury Secretary Scott Bessent US-Japan yen rescue