Warren Presses Bessent On Trump Administration’s Intervention in the Japanese Yen

Warren Presses Bessent On Trump Administration's Intervention in the Japanese Yen

"Given that American taxpayers would ultimately bear the cost if Japan were unable to repay the Department of the Treasury, it is critical for Congress to understand the Administration's justification for the intervention."

Text of Letter (PDF)

Washington, D.C. - U.S. Senator Elizabeth Warren (D-Mass.), Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, sent a letter to Secretary of the Treasury Scott Bessent pressing for more information regarding the Trump Administration's decision to deploy its Exchange Stabilization Fund (ESF) to boost financial markets and inflate the Japanese yen after it rapidly dropped to a 40-year low. Warren noted that the Administration has yet to provide a detailed justification for its intervention, nor has it officially disclosed how much taxpayer-linked funds were spent purchasing yen.

"The mechanisms through which Treasury executed the yen purchase raise serious questions regarding the costs to American taxpayers," wrote Ranking Member Warren.

In her letter, Warren noted that immediately after the U.S. intervened, the yen's value surged, but in recent days, it has weakened again. In fact, the yen has lost half of the value it had gained since the intervention, fueling questions about the need for further interventions, which Secretary Bessent has signaled openness to.

"Japan is the largest foreign holder of U.S. debt, meaning that Japan's currency market can affect U.S. treasuries and the long-term interest rates that American families pay. Yet it's not clear the intervention helped the U.S. economy - or even strengthened the yen over the long run," wrote Ranking Member Warren.

Ranking Member Warren also raised concerns over the Trump Administration's lack of transparency in its deployment of the ESF: "Just last year, Treasury deployed the ESF to provide a $20 billion politically driven, taxpayer-backed bailout to Argentina. Additionally, neither Treasury nor the Fed, acting as its fiscal agent, informed the European Central Bank (ECB) in advance that it intended to sell euros to fund the yen purchase… This marked a departure from the decades-long practice of advance coordination among Western central banks."

To further inform the Ranking Member's oversight duties, Ranking Member Warren requested that Secretary Bessent provide written responses to her questions as to why U.S. taxpayers are being asked to inflate a foreign currency and boost Japan's financial markets.

###

• Print
• Email
• Tweet