U.S. Treasury Secretary Scott Bessent, in a letter to Senator Elizabeth Warren
on Aug. 27, defended last month’s use of the Exchange Stabilization Fund (ESF)
to intervene in the yen. He warned disorderly yen swings could force Japan — a
major holder of U.S. Treasures — into forced selling, destabilize global
markets and ultimately push up borrowing costs for U.S. households and firms.
Bessent declined to disclose the size of the intervention, confirmed the ESF
used existing foreign-currency assets to buy yen and said officials had
considered using euros. He said the action was lawful and that the U.S. provided
no credit to Japan. Japan spent a record $96.4 billion last month defending the
yen.
