US Treasury Details $97 Billion Yen Rescue Mechanism to Senator Warren

Treasury Secretary Scott Bessent informed Senator Elizabeth Warren that the United States did not extend any loan to Japan. Instead, it purchased yen. Because of this, Japan has no debt to the US, leaving nothing that could fall into default.

Warren had warned that American taxpayers would absorb the losses if Japan failed to make repayment. Monthly Treasury filings confirm Bessent's account of how the yen intervention was structured. They also undermine her broader argument.

The Fund Can Only Hold Euros and Yen

The Exchange Stabilization Fund is a Treasury reserve that the secretary can deploy without fresh congressional approval. Its foreign currency holdings come in only two denominations.

As of June 30, the fund held $14.19 billion in euros and $2.57 billion in yen. Consequently, selling euros to acquire yen was the only available transaction.

A loan creates an obligation to repay, but an asset swap does not. The fund simply holds more yen now 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 actual concern is price risk rather than default risk, as the yen was trading at 160.17 per dollar at the time of writing, weaker than the 157.4 that the rescue operation achieved. This indicates that most of the gains have dissipated.

Japan Published Its Yen Intervention Total, America Did Not

Japan released its total on Friday, showing that its interventions amounted to 15.4 trillion yen, approximately $97 billion, between July 30 and August 26.

Warren’s deadline was August 28, and Bessent met that ultimatum but did not disclose any figure.

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 note suggested $5 billion to $10 billion, a number the Treasury has never verified.

For context, the most recent US yen purchase occurred in June 1998. Fed records place it at $833 million, divided equally between the Fed and the Treasury fund.

However, Senator Warren’s comparison to Argentina is questionable, as Treasury filings indicate Buenos Aires drew $2.5 billion from a $20 billion facility 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.

The US took notice because Japan holds $1.12 trillion of American debt, more than any other nation. A yen crisis would increase US borrowing costs.