US Treasury Secretary Scott Bessent is drawing on his hedge fund background as he takes an unusually active role in supporting Japan’s efforts to stabilise the yen, adopting a market-focused approach that observers say differs markedly from that of his predecessors, according to a report by Bloomberg.
Bessent, who previously managed macro investment strategies and earned a reputation as one of the industry’s leading currency traders during his time working for George Soros, has helped coordinate the first joint US-Japan currency intervention in almost three decades.
His tactics have included publicly signalling Washington’s willingness to purchase yen, discussing the potential use of the Federal Reserve’s Foreign and International Monetary Authorities (FIMA) Repo Facility, and confirming that US authorities deployed euro reserves as part of the intervention to avoid putting additional pressure on the US dollar.
Market participants say the strategy reflects the instincts of a buy-side investor rather than a traditional Treasury secretary.
Stephen Myrow, managing partner at Beacon Policy Advisors and a former US Treasury official, said Bessent appeared to be approaching the role more like a macro hedge fund manager than a conventional policymaker, focusing on market credibility and investor psychology.
The intervention helped the yen recover from multi-decade lows, although investors remain divided over whether the rebound will prove sustainable. Bessent has indicated that further action remains possible, warning that continued yen weakness could trigger broader depreciation across Asian currencies.
Analysts also noted Bessent’s willingness to use a wider range of policy tools than has typically characterised US foreign exchange policy. Chris Turner, global head of markets at ING, said the recent interventions suggest the Treasury is becoming more prepared to use the Exchange Stabilization Fund to pursue broader economic and geopolitical objectives.
Before entering government, Bessent spent decades in the hedge fund industry, including senior investment roles at Soros Fund Management, where he worked alongside renowned macro investor Stanley Druckenmiller. During that period, Soros Fund Management generated more than $1bn from successful bets against the yen as Japan pursued aggressive monetary easing under former Prime Minister Shinzo Abe.
Bessent’s long-standing ties to Japan have also shaped his approach. He has visited the country more than 50 times and has maintained close relationships with senior Japanese policymakers, including Finance Minister Satsuki Katayama and Bank of Japan Governor Kazuo Ueda.
The Treasury secretary has also highlighted the potential role of the Federal Reserve’s FIMA Repo Facility, which allows foreign central banks to access dollar liquidity without immediately selling US Treasury holdings. The facility could help Japan support its currency while limiting disruption to the Treasury market.
