U.S. Treasury Secretary Scott Bessent was photographed at Camp David with a notepad indicating plans to buy up to $10 billion in Japanese yen. The disclosure coincides with Ministry of Finance intervention tactics and Bank of Japan hawkish warnings aimed at squeezing currency speculators.
U.S. Treasury Secretary Scott Bessent’s private notes at a cabinet meeting revealed active consideration of U.S. intervention in foreign exchange markets. A Reuters photograph taken on July 31, 2026, at 11:33 ET during a cabinet meeting at Camp David, Maryland, captured a notepad in front of Bessent bearing the underscored words To Do
followed by Buy Japanese Yen (JPY) $5-10 bil,
according to Reuters reporting.
The visible notepad carried no other text, and Bessent’s name card sat directly above it on the conference table. Treasury had notified several banks that a U.S. intervention in the yen market could occur on Friday, citing a source familiar with the situation. A U.S. Treasury spokesperson did not immediately respond to requests for comment regarding the notepad or whether the Treasury executed an intervention to strengthen the yen against the dollar on Friday, according to Reuters.
Japan Shifts to Targeted Tactics Against Yen Short Sellers
–/wp:heading>
Japanese monetary authorities have abandoned their prior practice of signaling intervention risks ahead of time. Instead, officials shifted to a targeted campaign designed to squeeze speculators and increase the financial cost of betting against the yen, two sources familiar with the matter told Reuters in July. The Ministry of Finance departed from calibrated jawboning to prepare for abrupt market entries aimed at wiping out speculative short-yen positions without establishing a publicly understood exchange-rate threshold.
This shift relies on silence as a policy tool to keep traders uncertain. Previous interventions were heavily telegraphed, allowing traders to unwind short positions and avoid losses. By keeping markets guessing, authorities aimed to punish speculative positioning. The timing of intervention is difficult. The purpose would be to hit speculators hard so if needed, authorities will step in,
one source told Reuters, adding that the focus rests on preventing excessive currency falls rather than defending a specific exchange rate.
Diverging Interest Rates and Four-Decade Lows
–/wp:heading>
The currency pressure stems from a wide interest-rate gap between Japan and the United States. While the Bank of Japan raised its policy rate to 1% last month, it remains far below the Federal Reserve’s 3.50% to 3.75% range. This differential continues to incentivize yen-selling by market participants.
The yen slumped to a 40-year low of 162.66 per dollar on a Tuesday in July and traded at 162.50 during midday sessions in Tokyo, according to Reuters. This followed a record expenditure of 11.7 trillion yen ($72 billion) by Japan on foreign exchange intervention between late April and early May. Although that prior foray provided a brief boost, the currency resumed its downward trajectory.
Bank of Japan Deputy Governor Ryozo Himino warned in June that rising import costs from a weak yen could accelerate underlying inflation as companies increasingly pass expenses onto consumers. The central bank’s quarterly tankan survey in July showed business sentiment at an eight-year high alongside record corporate inflation expectations, reinforcing the rationale for further rate increases.
Market Rebound and International Coordination
–/wp:heading>
Data from LSEG illustrates a substantial strengthening of the yen during Friday afternoon trading on July 31, 2026. The dollar dropped from approximately 158.9 yen at about 4:14 p.m. (2014 GMT) to roughly 157.6 yen just before 5 p.m. (2100 GMT), representing a decline of about 0.8%, following Japanese authorities stepping in earlier that morning in Tokyo.
U.S. backing remains critical for Japanese interventions because G7 partners generally justify currency market actions only when countering disorderly movements. While U.S. Treasury Secretary Scott Bessent previously emphasized the necessity of further Bank of Japan rate hikes without explicitly endorsing recent Japanese interventions, the Camp David notepad and Treasury bank alerts indicate active U.S. alignment. The U.S. Treasury has not intervened independently to prop up the yen since a coordinated G7 response following Japan’s 2011 earthquake and tsunami.