Scott Bessent warns yen weakness risks broader Asian currency depreciation

US Treasury Secretary Scott Bessent has sounded the alarm on Japan’s sliding yen, warning that the currency’s weakness has fueled domestic inflation and could trigger a domino effect of depreciation across Asian currencies. The yen has fallen to its weakest levels since 1986, prompting the United States and Japan to coordinate direct intervention in foreign exchange markets. The intervention and what’s behind it The coordinated effort took place over August 1-3, 2026, with both countries purchasing yen to prop up its value. A Reuters photographer captured a notepad during a cabinet meeting showing Bessent’s plan in stark terms: “Buy Japanese Yen (JPY) $5-10 bil.” Bessent publicly acknowledged the yen’s “substantial undervaluation” on August 1, backing Japan’s own efforts to restore some balance to its battered currency. The former hedge fund manager, who was confirmed as Treasury Secretary in January 2025 under President Trump, knows the yen trade intimately. He reportedly profited from yen-related positions during his time in finance. The weak yen has made imports significantly more expensive for Japanese consumers and businesses, feeding into inflationary pressures that the Bank ...