<p>Treasury Secretary Scott Bessent responded to Senator Elizabeth Warren (D-MA) on August 29, 2026, regarding a disagreement over the Treasury Department's decision to conduct a joint currency intervention with Japan to support the yen, which had fallen to a 40-year low at the beginning of August.</p>
<p>Warren sent a letter to Bessent on August 14, requesting more information about the Trump administration's use of the Exchange Stabilization Fund (ESF) to support the yen. She stated that the administration had not provided a detailed justification for the intervention or disclosed the amount of taxpayer-linked funds used in the currency purchase.</p>
<p>In his response, Bessent criticized Warren's understanding of foreign exchange markets, stating that her letter contained inaccuracies regarding the source of the funds and the nature of the transaction. He clarified that the Treasury exchanged existing ESF foreign-currency assets for yen, without any new congressional appropriation or credit extended to Japan. He emphasized that Japan does not owe the Treasury any money, eliminating the risk of repayment failure.</p>
<p>Warren remarked on Bessent's recent challenges, including his involvement in the conflict in Iran, and noted that his efforts to support the yen had not been successful. She referenced criticism from Bessent's mentor regarding his credibility in Treasury markets.</p>
<p>Bessent further warned that disorderly yen markets could negatively impact global markets and increase borrowing costs for Americans, drawing a comparison to a previous intervention with Argentina. He concluded his letter by expressing hope that future correspondence would reflect a better understanding of currency transactions.</p>