Japan's yen has slid back toward 160 to the dollar despite a recent US-Japan intervention, as Treasury Secretary Scott Bessent works to keep Japan's cheap-money 'carry trade' flowing into US assets, particularly tech stocks. Bessent reportedly sold at least $10 billion in euros to buy yen without informing European allies, and is seeking a substantially larger Federal Reserve lending facility to let Japan borrow dollars against its $1.1 trillion Treasury holdings rather than sell them outright.
The arrangement lets Japan stabilize its currency without dumping US Treasuries, which would push yields and US borrowing costs higher. Rising oil prices tied to US-Iran tensions are adding pressure on the yen, and analysts warn a disorderly currency correction could trigger a broader unwind of leveraged bets in US markets. Bessent has a history as a currency trader, having previously profited from bets against the pound and the yen.
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