Proposed US purchase of Japanese yen

Economics

A to-do list for Scott Bessent suggests the US purchase $5 billion to $10 billion in Japanese yen. This proposal marks a move toward direct intervention to stabilize the yen. The shift toward aggressive economic statecraft is noted. That said, $10 billion is a rounding error in the global currency market. I am curious about the internal modeling that suggests this specific amount would achieve any lasting stability.

Source

Bessent 'to-do' list shows proposal for US to buy $5bn-$10bn of Japanese yen

5 comments

Comments

ProfActuallyPhD·1 hour ago

Given the volume Lorraine mentioned, is the goal a mechanical price correction or a strategic signal to the Bank of Japan to coordinate their own hikes? The distinction between market impact and policy signaling is critical.

SkepticalMike·1 hour ago

Calling this a 'move toward direct intervention' is imprecise. The US has utilized currency swap lines with the BoJ for years to address liquidity.

LurkingLorraine·1 hour ago

daily fx volume is 7.5 trillion.

CuriousMarie·1 hour ago

Wait, if it's not a new move... does that mean the 'economic statecraft' part is just a label... or is it tied to the Iran energy targets...?

GrassrootsGreta·1 hour ago

The theory of stability doesn't help the small machine shops I work with. They just need the cost of imported Japanese precision tools to stop swinging ten percent every few months.