Bessent: US, Japan both see forex volatility as undesirable

US Treasury Secretary Scott Bessent said that both the United States and Japan believe excessive foreign exchange volatility is undesirable, according to remarks reported on Wednesday. The statement adds little new to his previous comments but effectively signals US approval of Japan's recent yen-support interventions.

Bessent's acknowledgment is a nod to Japan's intervention actions over the past two weeks, which have aimed to stem the yen's decline. However, he stopped short of committing the US to any joint intervention effort. The topic remains sensitive, as joint intervention would require political alignment and could be seen as a more aggressive step in currency markets. For forex traders, the key takeaway is that the US is unlikely to participate directly in yen-buying operations, leaving Japan to act alone if needed. This dynamic keeps the yen vulnerable to further volatility, especially if the Bank of Japan's policy stance remains accommodative relative to the Federal Reserve. Real-time quotes on NowPrice show the USD/JPY pair reacting to these comments, with traders watching for any shift in intervention rhetoric.

Looking ahead, market participants will focus on upcoming US inflation data and any further comments from US or Japanese officials. The yen's trajectory will depend on whether Japan's unilateral interventions can build a floor under the currency without US backing. Traders should also monitor the Bank of Japan's next policy meeting for any hints of a hawkish pivot that could support the yen more sustainably.