Scott Bessent Notepad Leak Reveals U.S. Plan to Buy Japanese Yen

U.S. Treasury Secretary Scott Bessent inadvertently exposed a confidential to-do list during a cabinet meeting at Camp David, Maryland, on July 31, 2026, revealing plans for potential U.S. purchases of $5 billion to $10 billion worth of Japanese yen, according to a Reuters photograph taken during the session.

The notepad, photographed over Bessent’s shoulder at 11:33 ET during an on-the-record portion of the meeting, featured the underscored words To Do followed by Buy Japanese Yen (JPY) $5-10 bil. The visual revelation arrived just two hours after Reuters reported that the U.S. Treasury had notified several banks that a market intervention might occur on Friday to support Japan’s currency.

Japan Shifting to Ambush Tactics Against Short Sellers

Before the U.S. Treasury’s involvement became visible, Japanese financial authorities had already modified their strategy to combat persistent downward pressure on the yen. According to two sources familiar with the matter, the Ministry of Finance (MOF) abandoned its previous habit of telegraphing intervention risks and signaling specific exchange-rate thresholds, opting instead for surprise operations designed to punish speculative short sellers.

Rather than relying on a public line in the sand, officials utilized silence as a policy instrument. This calculated ambiguity aimed to raise the financial hazard of holding short positions against the yen. The timing of intervention is difficult. The purpose would be to hit speculators hard so if needed, authorities will step in, one source explained, adding that the focus rests on preventing excessive depreciation rather than defending an arbitrary numerical rate.

The shift follows a massive expenditure earlier in the year. Japan deployed a record 11.7 trillion yen, equivalent to $72 billion, in foreign exchange interventions between late April and early May. Despite those efforts, the currency resumed its descent, tumbling to a 40-year low of 162.66 per dollar on a Tuesday in July before stabilizing near 162.50 during midday trading in Tokyo.

Divergent Interest Rates and Bank of Japan Pressure

The sustained weakness of the yen stems largely from a wide interest rate differential. While the Bank of Japan (BOJ) raised its policy rate to 1% last month, it remains far below the Federal Reserve’s range of 3.50% to 3.75%. Hawkish commentary from U.S. central bank officials has consistently bolstered the dollar, maintaining the attractiveness of dollar-denominated assets.

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To counter this imbalance, BOJ officials maintained a hawkish rhetorical stance. Deputy Governor Ryozo Himino warned in June that currency movements significantly affect the national economy and inflation. Currency moves are among key factors affecting Japan’s economy and inflation, Himino stated, noting that rising import costs from a weak yen threaten to drive underlying inflation higher.

Supporting that assessment, the BOJ’s quarterly tankan survey showed business sentiment reaching an eight-year high alongside record corporate inflation expectations. Nomura Securities executive rates strategist Mari Iwashita emphasized the necessity of central bank cooperation, stating, Japan’s policy rate remains low compared with that of other countries. The BOJ’s cooperation is necessary to stop the yen’s falls.

Market Reactions and Subsequent Currency Shifts

Japanese authorities initiated intervention measures in Tokyo on Friday morning, generating a substantial strengthening of the yen during early trading hours. LSEG data captured another notable surge later that afternoon, showing the dollar dropping from approximately 158.9 yen at 4:14 p.m. to roughly 157.6 yen just before 5 p.m., marking an approximate 0.8% decline in value.

The U.S. Treasury has refrained from independent currency intervention since 2011, when it joined G7 partners in coordinated action following a devastating earthquake and tsunami in Japan. Current intervention guidelines generally restrict U.S. participation to actions counteracting disorderly market movements, making Secretary Bessent’s visible memorandum a significant indicator of potential policy alignment.

Finance Minister Satsuki Katayama maintained a disciplined public posture regarding the currency’s slide, reiterating only that Japan stood ready to respond appropriately at any time. Meanwhile, top currency diplomat Atsushi Mimura avoided verbal warnings entirely to keep markets off balance. As Rinto Maruyama, FX and rates strategist at SMBC Nikko Securities, observed, By refraining from commenting on the yen, Mimura is probably trying to make it harder for markets to gauge the next intervention timing.