US Treasury Secretary Bessent stated at a congressional hearing that recent interventions in the yen exchange rate have generated paper profits amounting to tens of millions of dollars. He also addressed topics such as AI regulation, US debt buybacks, and aid to Argentina during the same hearing.

Bessent mentioned that the US used "notional amounts" for the yen intervention, although the specific scale of operations was not disclosed, the resulting profits reached tens of millions of dollars. He emphasized that the US maintains a continuous bilateral communication mechanism with Japan regarding exchange rate interventions, rather than unilateral surprise actions.

Bessent also noted that a stronger yen benefits US exporters by reducing the price disadvantage of US goods relative to Japanese products. He pointed out that yen appreciation means the Japanese government does not need to sell US assets (such as US Treasuries) to intervene in the currency market, which objectively reduces the pressure on Japan to sell US Treasuries.

Regarding Argentina, Bessent revealed that past US aid operations to Argentina also brought tens of millions of dollars in profits to the US government, which he cited as a historical example of the Treasury's external interventions being "profitable."

On domestic fiscal operations, Bessent confirmed that the Treasury's debt buyback intervention plan has been "successful." He also stated that the funding offset plan for $5,000 checks is "in progress," but did not provide specific funding sources or timelines. On the topic of AI, Bessent stated that innovation and safety need to be addressed simultaneously, urging lawmakers not to exempt AI from liability and opposing giving AI companies a "blank check" for liability, calling it "one of the most important struggles of a lifetime."

From a market mechanism perspective, the profits from yen intervention mean that the US Treasury has played a role in selling dollars at high prices and buying yen at low prices in the foreign exchange market, with paper profits typically realized during position adjustments or valuation reassessments. The beneficiaries of a stronger yen are US export-oriented companies (improved relative price competitiveness), while the external effect on Japan is a reduction in the motivation to sell US Treasuries, thereby alleviating supply-side pressure on US Treasuries and providing marginal support for US Treasury purchases. The debt buyback operation involves the Treasury buying back less liquid old bonds and replacing them with newly issued bonds that are more liquid, aimed at lowering financing costs and stabilizing the yield curve. Both operations target the goal of lowering long-term financing costs in the US.

Currently, the specific notional amounts, timing of interventions, and yen trading price ranges have not been disclosed in the public hearing records, and the relevant scale remains described as "tens of millions of dollars."

Source: Public Information