Bessent cites volatility in Korean won while stressing stable yen's importance

Lead

U.S. Treasury Secretary Scott Bessent said Tuesday that the South Korean won has experienced "excess volatility," while underscoring the importance of a stable yen for the "entire region" following a recent joint intervention by the United States and Japan to boost the Japanese currency.

In a CNBC interview, Bessent said that "a stable yen is not only important for the U.S., but it's very important for the entire region because if the yen were to weaken substantially, then the other currencies would follow it." He added, "You know we'd seen excess volatility in the Korean won."

Coverage Comparison

The remarks, reported by Yonhap News Agency, came after Washington and Tokyo jointly intervened in the foreign exchange market last week in a rare move to address the yen's sharp fall against the greenback. Bessent expressed hope that the "right policies" in Japan would lead the yen to "get back to more of a normal equilibrium price."

Casting himself as an economic historian, Bessent said that in his view, the Asian financial crisis in the 1990s was partially triggered by an "overly weak" yen. He also noted that given Japan's trade flows, the size of its economy, and its contribution to the global savings market, a stable yen is crucial.

"The Japanese government understands that, and we are proud to stand with them in implementing their policies and help them stabilize the region," he said.

Key Claims

• Bessent said the South Korean won has seen "excess volatility," as reported by Yonhap.
• He stressed that a stable yen is important for the entire region, warning that a substantially weaker yen would drag other currencies down.
• The United States and Japan recently intervened in the foreign exchange market to support the yen, a rare joint action.
• Bessent linked the 1990s Asian financial crisis, in part, to an "overly weak" yen.
• He cited Japan's trade flows, economic size, and contribution to global savings as reasons why a stable yen is crucial.
• Asked about further intervention, Bessent said Washington is in "close" and "constant" communication with Tokyo and will "do whatever it takes" to support Japan in a way that helps the American economy and stabilizes the global economy.
• Yonhap reported that Bessent's remarks on the won reflect U.S. concerns amid speculation that currency instability could complicate Seoul's efforts to carry out its US$350 billion investment commitment in the United States under last year's trade deal.
• On the carry trade strategy — borrowing in low-interest currencies like the yen to invest in higher-yielding assets — Bessent indicated it will not disappear entirely, according to Yonhap's coverage.