US Lawmakers Press Bessent on Yen Intervention: Legal Basis and Funds Disclosure Demanded

US Democratic Senator Elizabeth Warren is demanding that Treasury Secretary Scott Bessent explain the rationale behind the government's intervention in the yen exchange rate.

As the Ranking Member of the Senate Banking Committee (the most senior Democrat on the panel), Warren has been conducting sustained oversight of the Trump administration's foreign exchange policy.

In a letter released Thursday (August 13), Warren wrote: "To date, this administration has not provided detailed justification for this intervention, nor has it formally disclosed the amount of funds used to purchase yen."

On July 30, the yen exchange rate began a sharp appreciation from around 164 yen per dollar. By August 3, the yen had reached 155.22 per dollar, its strongest level since May 7.

Bessent posted on social media at the time that "the coordinated US-Japan FX intervention action effectively curbed disorderly movements in the yen exchange rate," and that the Trump administration strongly supports "Japan's market and monetary policy measures to correct the yen's significant undervaluation."

This is reportedly the first joint intervention in the yen since 2011, when intervention was conducted to stem sharp yen appreciation — a 15-year gap. Meanwhile, this is the first yen-buying FX intervention since 1998, when it was deployed as a financial crisis response — a 28-year gap.

Bessent has indicated that the operation used euro funds from the Treasury's Exchange Stabilization Fund (ESF) — i.e., selling euros and buying yen, rather than selling dollars. However, Bessent has not disclosed how much money was deployed.

Warren noted that Congress expects the Trump administration to "exercise these powers prudently, in the national interest." She is demanding that Bessent provide a "legal analysis" of the Treasury's use of the ESF and respond by August 28.

Warren also asked Bessent to outline the expected cost to American taxpayers from this action, as well as the "scale and conditionality" of any US financial support currently under consideration for Japan.

In autumn 2025, Bessent used ESF funds to intervene in the Argentine peso market in support of Argentine President Javier Milei. At that time, Warren similarly called for oversight of that action.

In her latest letter, Warren characterized the Argentine action as a "politically driven, taxpayer-funded bailout." Bessent has stated that the US profited from its support for Argentina, but the Treasury has not published specific details of that intervention.

Warren also asked whether the Treasury consulted with the European Central Bank before using euros in the yen intervention.

Earlier this month, Bessent said in an interview that he had assured European officials that "this was merely a reallocation of our reserve assets." However, reports indicate the ECB only learned of the action after it had taken place.

Warren further asked how turmoil in Japanese financial markets would affect US employment, wages, and financial stability.

It is understood that Japan is the largest overseas holder of US Treasuries. Analysts speculate that one of the reasons Bessent decided to intervene in the yen was to avoid Japan selling US Treasuries, which could push up US Treasury yields.