US lawmakers question Besant: Why use American funds to intervene in the yen? Requesting disclosure of the scale and legal basis.

U.S. Senator Elizabeth Warren has asked Treasury Secretary Bessent to explain the Trump administration's justification for intervening in the yen, continuing the senior Democrat's ongoing scrutiny of the Trump administration's foreign exchange policy.

In a letter dated August 13, Warren wrote: "To date, the administration has yet to provide detailed justification for the intervention, nor has it formally disclosed how much taxpayer-related funds were used to purchase yen."

Bessent previously confirmed media reports that the U.S. and Japan had conducted their first joint intervention in the foreign exchange market since 1998 to support the yen. The action took place on July 31, but he has not yet specified the exact amount of funds used. He revealed that the operation used euro funds from the U.S. Treasury’s Exchange Stabilization Fund (ESF).

Warren pointed out that Congress requires the powers of the Exchange Stabilization Fund to be “used cautiously to advance national interests.” She requested Bessent provide “a legal analysis of the use of the Exchange Stabilization Fund” and called on the Treasury to respond by August 28.

As the highest-ranking Democrat on the Senate Banking Committee, Warren also asked Bessent to clarify the expected cost to American taxpayers from this operation, as well as “the size and conditions of any U.S. financial support currently being considered for Japan.”

Warren also more broadly asked how turmoil in Japanese financial markets could potentially impact U.S. jobs, wages, and financial stability.

Japan is the largest overseas holder of U.S. Treasury bonds. Analysts speculate that one reason Bessent decided to intervene in the yen was to avoid Tokyo selling off U.S. Treasuries, as a large sale could push up yields on U.S. Treasuries.

Bessent previously used the ESF to support Argentina

Bessent previously used the Exchange Stabilization Fund in the fall of 2025 to intervene in the Argentine peso, supporting President Javier Milei’s government.

At that time, Warren also requested a review of the related actions. In her latest letter, she described that operation as “a politically motivated, taxpayer-backed bailout.”

Bessent has indicated that the U.S. profited from its support of Argentina, but the Treasury has not disclosed details of this intervention.

Use of euro reserves also questioned

Warren also asked whether the Treasury communicated with the European Central Bank (ECB) before using euro funds in the yen intervention.

Earlier this month, Bessent said in an interview that he assured European officials that this action was “simply a reallocation of our reserve assets.”

However, the Financial Times reported that the ECB only learned of the action after it occurred.