US Treasury Calls Yen 'Contained' After Record $96.4B Intervention

Japan’s Ministry of Finance expended a record $96.4 billion in foreign exchange reserves through late August to stabilize the yen, pulling the currency back from a 40-year low of 164 per dollar. The US participated in the July currency intervention by deploying an estimated $5 to $10 billion equivalent, marking Washington's first move to support the Japanese currency in nearly three decades. Treasury Secretary Scott Bessent characterized the recent market moves as "pretty well contained" and explicitly pushed back on descriptions of a disorderly market as the dollar traded near 160.15 yen. Bessent endorsed Bank of Japan Governor Kazuo Ueda as a "market-savvy" central banker, signaling an anticipated transition away from Japan's decade-long Abenomics reflationary policy. The $96.4 billion defense effort represents a massive drawdown for Japan, creating secondary risks that a weakening yen could pressure Japanese institutions to sell off US Treasuries.