Bessent Warns BOJ on Yen Volatility as G20 Surfaces Euro Controversy Over Joint FX Intervention

US Treasury Secretary Scott Bessent used meetings on the sidelines of a G20 gathering in Asheville, North Carolina, to deliver pointed messages to Bank of Japan Governor about the yen, telling him to avoid excessive foreign exchange rate volatility and warning that a weak yen is adding to Japan's inflationary pressures. The remarks underscore Washington's continued involvement in yen stabilization after a coordinated intervention earlier this year, and come as Bessent separately said the Federal Reserve traditionally does not raise interest rates in response to a supply shock, comments that pushed the dollar index down 0.28% on Monday.

The G20 meeting also brought a pointed rebuke from Bundesbank President Joachim Nagel, who said the use of the euro in US and Japan FX interventions was discussed among G20 finance officials. Nagel criticized the US for selling euros to support the yen without consulting European partners in advance, calling prior coordination the customary practice in past interventions.

In a separate development with longer-term implications for the dollar's role in global finance, a consortium of 21 financial institutions including Goldman Sachs, Bank of America, and Deutsche Bank announced plans to launch a dollar-pegged stablecoin in early 2027. The group also intends to expand into stablecoins linked to other G7 currencies, reflecting renewed institutional interest in blockchain as crypto prices have risen.