‘I am the house now’: Bessent warns currency traders not to bet against yen
Comments follow July’s rare joint intervention with Tokyo to support Japanese currency
Emily Herbert, Ian Smith and Ramsay Hodgson in London
US Treasury secretary Scott Bessent said he had ‘pretty good insight’ into what Japanese policymakers were going to do © Sam Wolfe/ReutersUS Treasury secretary Scott Bessent has warned traders not to bet against the yen, saying that “I am the house now” following his recent intervention to support the Japanese currency.
“When we intervene with the Japanese yen, I have pretty good insight into what the Bank of Japan is going to do, what Japanese policymakers are going to do,” Bessent said in an event at Southern Methodist University in Texas on Tuesday.
“I have asymmetric information.
I am the house now,” Bessent said.
“You can bet against me if you want.”
Bessent’s comments come after an unusual joint US-Japan intervention in the yen at the end of July and are the latest sign of the US Treasury’s growing activism in financial markets, which has pitted the former hedge fund manager against traders.
Bessent’s interventions “may or may not succeed but they are increasing uncertainty and volatility,” said Mansoor Mohi-uddin, chief economist at Bank of Singapore.
The Treasury’s move to sell euros against the yen, which blindsided the European Central Bank, was viewed by analysts as reflecting Washington’s desire to keep Japan from having to sell US government bonds to support the currency, which had tumbled to a 40-year low in late July.
Bessent has also announced an expanded buyback operation in the US Treasury market, as he bids to rein in soaring government borrowing costs, with 10-year US Treasury yields hovering close to their highest level since 2023.
In mid-August he said the Treasury would “at least” double its purchases of long-term government bonds to $4bn.
The size of the initial buyback under the new regime will be announced later on Wednesday.
The yen has rebounded since the joint intervention, boosted by expectations that the Bank of Japan will speed up the pace at which it tightens rates, while speculation is rife over the potential further intervention by Japanese authorities and whether the country’s massive pension fund will bring money home.
The Japanese currency strengthened by as much as 0.5 per cent to ¥153.3 to the dollar on Wednesday, close to its strongest level of the year.
It was later at ¥153.59.
Lee Hardman, senior currency analyst at MUFG, said the Bessent comments will “reinforce expectations that Japan has agreed to change domestic policies to provide more support for the yen and back up support from joint intervention”.
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