Bessent Is Trying To Defuse A $2 Trillion Yen Bomb

James Foord Investing Group Leader Follow Summary Recent coordinated interventions have strengthened the yen, unwinding a $2 trillion+ carry trade and raising market risk. Unlike the August 2024 sell-off, this policy shift is telegraphed, with larger Treasury buybacks and joint U.S.-Japan efforts to avoid disorder. A controlled yen squeeze is possible if USD/JPY holds 153 and Treasuries remain stable, but a break below 152 signals risk-off. Gold and Bitcoin offer cleaner hedges, while crowded, duration-sensitive U.S. growth equities remain most exposed to disorderly moves. Looking for a helping hand in the market? Members of The Pragmatic Investor get exclusive ideas and guidance to navigate any climate. Learn More » Surendra Sharma/iStock via Getty Images Thesis Summary Treasury Secretary Scott Bessent recently said in a speech that investors would be advised not to bet against him, as “ he is the house now,” adding that on yen intervention he has "asymmetric information." This comes as USD/JPY This article was written by James Foord 29.69K Followers Follow James Foord is an economist by trade and has been analyzing global markets for the past decade. He leads the investing group The Pragmatic Investor where the focus is on building robust and truly diversified portfolios that will continually preserve and increase wealth. The Pragmatic Investor covers global macro, international equities, commodities, tech and cryptocurrencies and is designed to guide investors of all levels in their journey. Features include a The Pragmatic Investor Portfolio, weekly market update newsletter, actionable trades, technical analysis, and a chat room. Learn more. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.