US Treasury Secretary Besent says yen has substantially overshot equilibrium and US views excess yen volatility as unhealthy, adds the yen is very undervalued, according to Fox Business

A sitting US Treasury Secretary publicly declaring another major currency substantially undervalued and its volatility unhealthy is rare; the department's remit over the dollar has historically been exercised through studied ambiguity, and departures from that convention have tended to precede or accompany episodes of coordinated FX pressure rather than stand alone. Commentary of this kind functions as jawboning: it raises the perceived probability of concerted action and shifts the asymmetry for yen shorts, since positioning against a currency both Washington and Tokyo describe as mispriced carries intervention risk on both sides of the Pacific. The pertinent precedent is that verbal rounds from US officials on the yen have historically worked through the dollar-yen differential and speculative positioning first, with sustained moves requiring either rate convergence or actual coordinated operations, not words alone. The distinction worth drawing is between endorsement of Japanese intervention, which Tokyo has already conducted unilaterally in past episodes of rapid yen weakness, and a broader US shift toward a weaker-dollar posture, which carries wider implications for the majors. Worth watching is whether the language is echoed by other US officials or the President, whether Japan's finance ministry and the BOJ amplify it, and any change in the Treasury's FX report posture. As commentary from the principal US FX policymaker, this sits at the stronger end of the verbal-intervention spectrum.