The Yen Bailout Didn't Work

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The Yen Bailout Didn't Work​

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The Insane US-Japan Currency Bailout​

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In July 2026, the US Treasury did something it hadn't done since 1998: it intervened in the currency markets to prop up the Japanese yen — and Treasury Secretary Scott Bessent, a former Soros hedge fund manager, ran the trade in the strangest way possible, selling euros instead of dollars without telling the ECB. But this was never really about Japan. It was about protecting American borrowing costs at a moment when the US is paying more to borrow than it has in decades — with 30-year Treasury yields hitting their highest since 2001. This video breaks down the US-Japan yen intervention, the carry trade, the FIMA facility, and Bessent's huge bet on falling interest rates, and asks the real question underneath it all: is the Treasury Secretary a visionary macro trader, or a cornered man making an enormous gamble with the balance sheet of the United States? A look at currency intervention, the eroding "exorbitant privilege" of the dollar, and why America's cheap borrowing may be coming to an end.

 

[Oldenwisdom...قول بزرگ]

It cannot work... it is a bandaid just like all the rest of the things Bessent has done thus far...

He was hoping to build confidence and instead sapped it. One of the reasons why Japan has to be bailed out is because of the carry trade seeking higher yields in the US. To fix this if Japan raises rates at home makes those who've money tied up would want to exit international markets that money is tied in... so, by extending this Bessent gets to borrow at higher interest rates, buys cheaper Japanese yen... a double loss... only to buy time and keep the bond markets solvent and liquid.

But for how long?