Financing details clarified in US and Japan yen intervention

US Treasury Secretary Scott Bessent reported that regarding last month's Japanese yen intervention, the treasury's Exchange Stabilization Fund foreign exchange assets were swapped for yen and no loan was extended to Japan.

Exchange Stabilization Fund and Swap Transaction

In his response to a letter from Senator Elizabeth Warren, US Treasury Secretary Scott Bessent stated that the treasury's Exchange Stabilization Fund foreign exchange assets were swapped for yen. He emphasized that no new appropriations were allocated by Congress and no loan was extended to Japan.

Japan's Debt Status

Stating that Japan has no debt to the treasury, Bessent noted that therefore the country faces no risk of being unable to repay a non-existent debt.

US-Japan Relations

Reminding that Japan holds a large amount of US treasury bonds and is also a critical trade partner and ally, Bessent pointed out that disorderly yen markets could lead to instability on a global scale.

Financial Dimension of the Yen Intervention

According to data from Japan's Ministry of Finance, the government spent a total of 15.4 trillion yen, approximately 96.4 billion dollars, between July 30 and August 26 to support the yen.