Disorderly Yen Markets Could Raise U.S. Borrowing Costs: Bessent

Washington, Aug. 28 (Jiji Press)--U.S. Treasury Secretary Scott Bessent warned in a letter released on X on Friday that disorderly movements in the yen market could lead to higher borrowing costs in the United States, signaling concern about upward pressure on U.S. interest rates.

“Disorderly yen markets can trigger forced unwinds, which could destabilize global markets and ultimately raise borrowing costs for American families and businesses,” Bessent said in the letter responding to an inquiry by U.S. Sen. Elizabeth Warren, a Democrat, regarding the U.S. currency authorities’ yen-buying intervention in late July.

In the letter, Bessent also said that the U.S. Treasury Department “exchanged existing Exchange Stabilization Fund foreign-currency assets for yen” in accordance with the law governing the fund.

U.S. authorities are said to have intervened in markets by selling the euro and buying the yen, but Bessent did not disclose details such as the scale of yen purchases.

The dollar topped 160 yen for the first time in about a month in New York trading on Friday as expectations for an early interest rate hike by the U.S. Federal Reserve increased.

[Copyright The Jiji Press, Ltd.]