Yen falls 1% against dollar after Bessent rules out intervention

Investing.com -- The Japanese yen extended its drop to 1% against the U.S. dollar on Wednesday after Treasury Secretary Scott Bessent stated that the U.S. is "absolutely not" intervening in the dollar-yen exchange rate.

The yen’s decline came during Bessent’s interview on CNBC, where he emphasized America’s traditional strong dollar policy while clarifying the administration’s stance on currency intervention. "We don’t comment on intervention speculation," Bessent said, adding that the U.S. approach to a strong dollar "means setting right fundamentals."

Emerging market currencies also hit session lows following Bessent’s remarks. The Treasury Secretary suggested that sound economic policies would naturally attract capital flows into the United States, stating, "If we have sound policies the money will flow into US."

The comments come after a period of dollar weakness, with the greenback falling approximately 1.3% last Tuesday in its worst daily performance since April 2025. President Donald Trump had previously expressed approval of the weaker dollar during his visit to Iowa, describing it as "great."

Bessent also highlighted that the shrinking U.S. trade deficit "should help the dollar" and noted that the administration had implemented "good policies for growth" that contributed to recent stock market performance. However, he cautioned that previous years’ stock performance doesn’t necessarily dictate what will happen in 2026.

Regarding Federal Reserve matters, Bessent maintained that today’s interest rate decision is "up to the Fed" and revealed he had discussed the Fed Chair position with President Trump during their return flight from Iowa, though no decisions have been finalized.

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