U.S. Treasury to Repurchase Up to $6 Billion of Long-Term Bonds After Yen Intervention
Treasury Secretary Scott Bessent announced a $6 billion buyback of longer-dated Treasuries and earlier coordinated a yen-purchase operation with Japan, aiming to curb rising yields and support the Japanese currency.
The U.S. Treasury Department said it will repurchase as much as $6 billion of longer-dated Treasury securities in its next operation on Sept. 10, three times the usual amount, in an effort to lower Treasury yields. The move follows a coordinated purchase of Japanese yen with Japan’s Ministry of Finance in early August, intended to strengthen the yen against the U.S. dollar.
Treasury Secretary Scott Bessent, speaking at Southern Methodist University’s business school on Sept. 8, said the Treasury’s actions reflect its insight into Japanese policy and invited market participants to test the Treasury’s stance. > "Whenever people say, ‘Oh, well, the Treasury secretary is taking a risk,’ well, it’s my dream. I have asymmetric information," he said.
Long-term yields have risen amid higher U.S. debt levels, geopolitical tensions and inflation expectations, with the 10-year Treasury yield near 4.85% and the 30-year yield just above 5.30%. Higher yields increase borrowing costs for consumers and businesses and raise the interest burden on new government debt.
Analysts note that the expanded buyback could be funded from the Treasury’s general account, removing illiquid bonds from circulation without issuing new debt. Some market observers suggest the Treasury may consider even larger repurchases in the near future, though they caution that repeated interventions could signal limited policy options.
The yen has appreciated from roughly ¥158.9 per dollar to about ¥153.6 since the intervention, while longer-dated Treasury yields remain elevated. The Treasury’s dual actions aim to stabilize both currency and bond markets, but their effectiveness will depend on broader economic developments.