Treasury Secretary Scott Bessent is pushing for an expansion of a little-known Federal Reserve facility that lets foreign central banks swap US Treasuries for dollars. The goal: give Japan a pressure valve for its collapsing currency without forcing Tokyo to sell American government bonds on the open market.
The yen crisis and a coordinated intervention
The Japanese yen has been sliding toward levels not seen in roughly 40 years, and Bessent himself has described it as “very undervalued.”
In late July 2026, the US executed its first yen-buying intervention since 2011, coordinated directly with Japanese officials. The move reportedly involved the US Treasury purchasing Japanese yen through the New York Fed, selling euros in the process.
A Bessent notepad photographed at Camp David on July 31 included a line item reading “Buy Japanese Yen (JPY) $5-10 bil.”
What the FIMA facility actually does
The Federal Reserve’s Foreign and International Monetary Authorities Repo Facility (FIMA) was born during the 2020 pandemic panic and made permanent in 2021. It lets foreign central banks temporarily hand their US Treasury holdings to the Fed and get dollars back. The facility typically allows up to $60 billion per institution. Bessent wants that ceiling raised.
“We should encourage it to be upsized in the coming months,” Bessent said on August 2, 2026.
When a country like Japan needs dollars to defend its currency, the traditional move is to sell US Treasuries on the open market. That floods the market with supply, pushes bond prices down, and drives yields up. The FIMA facility short-circuits that chain: Japan gets its dollars, the US bond market stays calm.
Why crypto and macro investors should care
The July 2024 yen carry trade unwind provided a preview of carry trade unwind chaos, briefly dragging Bitcoin below $50K as leveraged positions across asset classes blew up simultaneously. Bessent’s push to manage yen volatility through the FIMA facility and direct intervention is, in part, an attempt to prevent a repeat of that scenario at a larger scale.
For crypto investors specifically, the key variable to watch is whether the FIMA expansion actually materializes and how aggressively Japan uses it. If the facility’s $60 billion per-institution cap gets meaningfully raised, it would represent a structural shift in how dollar liquidity is distributed globally.