Seoul: U.S. Treasury Secretary Scott Bessent expressed concerns about "excess volatility" in the South Korean won while emphasizing the necessity of a stable yen for regional economic stability. His remarks followed a rare joint intervention by the United States and Japan to bolster the Japanese currency against the U.S. dollar. According to Yonhap News Agency, Bessent shared his insights during a CNBC interview, explaining that a stable yen is crucial not only for the U.S. but also for the entire region. He warned that a significant weakening of the yen could lead to other currencies following suit, which could cause further instability. Reflecting on his perspective as an economic historian, Bessent noted that the Asian financial crisis of the 1990s was partly triggered by an "overly weak" yen. He expressed optimism that the recent market interventions and Japan's policies would restore the yen to a "more normal equilibrium price" level, stressing the importance of a stable yen given Japan's economic size and its role in the global savings market. Bessent emphasized the close communication between Washington and Tokyo, stating that both nations are committed to supporting Japan's efforts to stabilize the region. He assured that the U.S. would take necessary actions to benefit the American economy and taxpayer while maintaining global economic stability. Addressing the "carry trade," Bessent predicted its persistence due to Japan's substantial foreign assets and liquidity provisions. However, he cautioned that an unfavorable yen level could trigger competitive devaluations, which he deemed unhealthy for the global economy.
