For the first time in 30 years, the US Treasury Secretary Yellen is intervening in the US bond market by buying yen and expanding the scale of buybacks.

(1) This year, US Treasury Secretary Bessent carried out a series of unexpected intervention operations, making him the most interventionist Treasury Secretary in financial markets in decades. The latest measure, announced on August 19, is to at least double the size of the 10- to 30-year Treasury buybacks (just two weeks after the buyback schedule was announced). Earlier this month, he had already opened the door to reducing the issuance of long-term bonds, aiming to curb the rapid rise in borrowing costs.(2) In terms of foreign exchange intervention, on July 31, Bessent led the United States’ first purchase of yen in 30 years. This move was interpreted as an effort to reduce Japan’s need to sell US Treasuries due to intervening in the FX market. Earlier this year, he also launched an exchange rate inquiry mechanism (inquiring yen quotes from banks by phone), which surprised former Japanese officials.(3) OMFIF analysts pointed out that Bessent is an “absolute man of action,” and his intervention style is closely related to his background in the hedge fund industry, showing his sensitivity to market signals and his rapid decision-making style.