Scott Bessent Urges Japan to Use Fed Facility to Support Yen

Scott Bessent, the U.S. Treasury Secretary, has urged Japan to utilize the Federal Reserve's FIMA Repo facility to strengthen the yen after the currency reached four-decade lows. By swapping U.S. Treasuries for dollar cash, Japan can intervene in currency markets without permanently depleting its stockpile of U.S. assets.

Bessent has also called on the Federal Reserve to consider up-sizing the facility to provide Japan with increased leverage. He characterized an "overly weak yen" as a contributing factor to the 1997-98 Asian financial crisis, arguing that stabilizing the currency now could prevent other Asian currencies from tumbling.

Observers note that this approach marks a departure from traditional Treasury conduct, suggesting Bessent is operating more like a macro trader than a conventional Treasury secretary.