How the US Helped Japan Pull Off a $97 Billion Yen Rescue

Treasury Secretary Scott Bessent tells Senator Elizabeth Warren that the United States never lent Japan a cent. It bought yen instead. Accordingly, Japan owes nothing, so nothing can go unpaid.

Warren had warned that taxpayers would eat the loss if Japan failed to repay. Treasury’s own monthly filings back Bessent on how the yen intervention worked. They also weaken her wider case.

The Fund Can Only Hold Euros and Yen

The Exchange Stabilization Fund is a Treasury reserve the secretary can tap without a new vote in Congress. Its foreign cash comes in just two currencies.

On June 30, the fund held $14.19 billion in euros and $2.57 billion in yen. So selling euros for yen was the only trade on the menu.

A loan creates a debt, bun asset swap does not. The fund simply owns more yen than it did in July.

“Japan owes Treasury nothing. There is therefore no risk that Japan will fail to repay a debt that does not exist,” Bessent wrote in the letter.

The real risk is price, not default, as the yen traded at 160.17 per dollar as of this writing, weaker than the 157.4 the rescue delivered. This means most of the gain has drained away.

Japan Published Its Yen Intervention Total, America Did Not

Japan published its total on Friday, showing that its operations reached 15.4 trillion yen, roughly $97 billion, between July 30 and August 26.

Warren’s deadline was August 28, and Bessent met this ultimatum, but named no number.

In her latest sciolistic letter to me, @SenWarren made it clear that she knows even less about foreign exchange markets than she does about banking.What is equally shocking, but not surprising: not a single member of the media mob has a rudimentary-enough level of financial… pic.twitter.com/0mmp2tapqJ

— Treasury Secretary Scott Bessent (@SecScottBessent) August 28, 2026

A leaked notepad indicated $5 billion to $10 billion, a figure the Treasury has never confirmed.

For scale, the last US yen purchase came in June 1998. Fed records put it at $833 million, split evenly between the Fed and the Treasury fund.

Notably, however, Senator Warren’s Argentina comparison is shaky, as Treasury filings show Buenos Aires drew $2.5 billion of the $20 billion line and repaid every dollar by December 2025.

“Argentina has both quickly and fully repaid its limited draw on the swap facility with the United States, such that the Exchange Stabilization Fund currently does not hold any pesos,” Bessent revealed in January.

America cared because Japan holds $1.12 trillion of US debt, more than any other country. A yen panic lifts American borrowing costs.