The yen looks set to keep strengthening against the dollar, because Treasury Secretary Scott Bessent appears determined to push USD/JPY lower. Bessent said in an interview that as "the house" he knows exactly what Japan, the Bank of Japan and its policymakers will do when the US intervenes in the yen, and dared markets to bet against him. As a former fund manager who helped successfully attack the pound and the Thai baht, he holds a real information advantage. x.com 

The yen could see a violent short squeeze, as Treasury Secretary Scott Bessent claims asymmetric insight into Japan's next policy move and openly dared traders to short it, saying "I am the house now." If Japan tightens or intervenes again, unwinding the huge leveraged yen carry trade could force liquidations across stocks and crypto. @QmoCrypto notes Japan has sold about $71 billion of Treasuries while defending the yen. x.com 

The US needs a weaker yen, so Treasury Secretary Bessent's visible note to "Buy Japanese Yen (JPY) $5-10 bil," chickenfeed in any case, looks like a psyop and misdirect, calling for the opposite positioning; the buying was a chunk of carry trade to close. Per @TreasuryBonds1, Japan reportedly spent about $53 billion buying yen in a single day, its largest intervention ever, and Bessent called the yen very undervalued. x.com  x.com 

The yen has another source of support because Treasury Secretary Bessent can use the Fed's FIMA repo facility against dollar-yen. Japan can pledge US Treasuries to the Fed for dollars and sell them for yen, without dumping Treasuries and pushing US yields higher. The facility's limit is reportedly $60 billion per counterparty, and Bessent has already advocated expanding it. x.com 

Japan's intervention may mark a turn higher for the yen, but a surge like past appreciation periods is unlikely because there is no yen carry trade to unwind these days. Japan's near 5% of GDP current account surplus is also less structural than it looks: trade is near neutral, and the surplus comes from large investment income that is usually reinvested abroad automatically. x.com  x.com 

The Japanese yen is weakening again despite the coordinated Bank of Japan and US Treasury intervention, having given back about 38% of the manufactured gain. More government intervention looks likely soon as the currency slides. x.com  x.com 

The yen is strengthening sharply toward ¥153-154 as the Bank of Japan hikes rates and intervenes, starting to unwind the global carry trade funded by cheap yen. That is not a normal FX move but a systemic margin call on every leveraged position funded in yen, with the BOJ now playing its own game rather than following the Fed. x.com 

The yen is strengthening on a carry-trade unwind as markets price in a 50-basis-point BOJ hike. @VKMacro notes USD/JPY fell below 157 and held, something intervention could not achieve. Kevin Warsh's speech was an art-of-the-deal sleight of hand that fooled markets into seeing a hawkish Fed. Yen calls are working because volatility was too low for the coiled spring of carry leverage. x.com  x.com 

The yen remains weak, with the dollar already back above 160 yen, and if the Fed hikes, Treasury Secretary Scott Bessent will have to buy Japanese government bonds along with the yen. Bessent has said a disorderly yen could ultimately raise US rates. x.com 

Shorting the yen against the dollar makes little sense given Japan's stronger fiscal and external position. Japan's primary deficit is a fraction of the US's, it is cutting energy imports through renewables, holds massive external assets and shows budget wariness, such as refusing Asian Games spending. Meanwhile Trump promises $5,000 per voter for the midterms. Shorting the yen against commodities such as silver is understandable; against the dollar, not. x.com  x.com  x.com