Treasury Secretary Scott Bessent stood before an audience at Southern Methodist University and essentially told the entire currency trading world to come at him. “I am the house now,” he declared, claiming he holds “asymmetric information” about Japanese policy and daring investors to take the other side of the yen trade.
The intervention that started it all
Bessent’s bravado didn’t materialize out of thin air. In late July, the US executed its first yen-buying intervention since 1998, coordinating with Japan to stabilize the currency after it had weakened dramatically against the dollar. The USD/JPY exchange rate had climbed to nearly 164 before the operation.
Japan threw serious weight behind the effort, spending a record $96.4 billion to support its own currency.
Since the intervention, USD/JPY has dropped to around 153, a move of roughly seven percent in the yen’s favor.
