Yen in NY Temporarily Falls to Mid-154 Yen Range; Bessment States "No Intervention"
On the 28th, the Yen in NY saw significant movement, temporarily falling to the mid-154 yen range against the US dollar. This shift followed comments from US Treasury Secretary Janet Bessment.
Bessment's Denial of Intervention
In an interview with CNBC, Secretary Bessment explicitly denied any market interference. When asked if the US was conducting yen-buying intervention, she stated,
"Absolutely not."Following this remark, the Yen in NY weakened further, with the dollar gaining several tens of sen. According to CNBC.
Background: Market Speculation and "Rate Checks"
The week prior had been marked by volatility. On the 23rd, suspected "rate checks" by US authorities—often a precursor to intervention—triggered yen strength. Comments from former President Trump on the 27th praising dollar weakness added momentum.
The "Strong Dollar" Policy Reiterated
Secretary Bessment reiterated the long-standing US stance, telling CNBC, "The United States has always maintained a 'strong dollar policy.'" Some analysts viewed this as a signal that Washington would not accept excessive dollar depreciation. However, the phrase is historically used to signify stability of the key global currency, not necessarily a push for a higher valuation. According to Reuters.
Broader Context and Currency Concerns
The Secretary's focus has consistently been on monitoring potential currency devaluation by other nations, not on actively weakening the dollar. Key concerns and current conditions include:
- A longstanding concern that Asian currencies are undervalued against the dollar.
- Recent broad-based dollar weakness, affecting not just the Yen in NY but also the euro.
- A potential fear that unchecked dollar declines could erode global confidence in the currency.
