US Treasury Secretary Bessent's Note Reveals Yen Purchase Plan

A Reuters photograph taken during a cabinet meeting at Camp David revealed a 'to-do' list on US Treasury Secretary Scott Bessent's notepad, indicating a plan for the United States to purchase $5 billion to $10 billion worth of Japanese yen (JPY). This disclosure sent ripples through the markets, signaling Washington's intent to support the Japanese currency, which has been under significant pressure against the dollar, trading near 40-year lows.

The event unfolded on Friday, July 31, 2026, when a photograph, captured over Secretary Bessent's shoulder during the cabinet meeting, showed a Camp David notepad with the underscored words 'To Do' followed by 'Buy Japanese Yen (JPY) $5-10 bil'. Following this, the Financial Times reported that the US Treasury Department, through the Federal Reserve Bank of New York, had conducted a sale of euros to buy yen via Goldman Sachs and Morgan Stanley. This reported action marks the first direct US support for the yen since 2011. Approximately two hours before Bessent's note became public, Reuters had reported that the Treasury had informed several banks about potential intervention in the yen market.

Japanese authorities had also intervened in Tokyo earlier on the same day to support the yen. Central bank data suggests that Japan may have sold as much as $58.97 billion to buy yen on Thursday, indicating repeated efforts to stem the currency's weakness. Treasury Secretary Bessent had previously stated on Fox Business on Thursday that the yen was 'very undervalued' and that excessive volatility was unhealthy.

The news of potential intervention and the subsequent reports of actual intervention helped push the yen higher against the dollar. In late afternoon trading on Friday, the dollar dropped from approximately 158.9 yen to 157.6 yen, representing a decline of about 0.8%. This indicated a strengthening of the Japanese currency. The yen's weakness has largely been attributed to the widening interest rate differential between the US and Japan, as well as factors such as rising oil prices.

This development is considered a significant turning point in the foreign exchange markets. The coordinated effort by the US to support the yen alongside Japan sends an important signal within the global economic context. Some analysts had previously warned that defending a weakening yen could compel Japan to sell its holdings of US Treasury bonds, a move that risked putting pressure on US bond yields. Therefore, the direct intervention by the US could also be aimed at preventing such a scenario.

Market expectations and analyst comments suggest that the coordinated action by the US and Japan has a higher chance of sustaining the yen's gains, at least in the short term. Experts like Osamu Takashima from Citigroup noted that the dollar-yen upside is likely limited for now, given the apparent willingness of the US to help Japan defend its currency. Analysts anticipate that the market will remain wary of further interventions, potentially reducing speculative selling positions in the yen. However, for a more durable recovery in the medium term, it is emphasized that real interest rates need to rise more substantially, and concerns regarding fiscal sustainability must be addressed.