US Treasury Secretary asks Fed to expand FIMA facility capacity to support yen without Treasury sales

US Treasury Secretary Scott Bessent has asked the Federal Reserve to expand the capacity of its FIMA Repo Facility so Japan can raise the dollars needed to support the yen without large-scale sales of US Treasury holdings, Ecoiran reported Thursday, August 6, 2026 (15 Mordad 1405), citing Bloomberg. The request follows the coordinated US-Japan intervention that pulled the yen back from a 40-year low of 163 per dollar to 157 starting Friday, July 31 (9 Mordad). The FIMA facility, created during the COVID-19 crisis and made a permanent tool in 2021, lets foreign central banks post Treasury securities held at the Federal Reserve Bank of New York as collateral for short-term dollar loans, without directly selling the bonds on the market. Japan holds more than $1.114 trillion in US Treasuries, the largest foreign holder of US government debt, and large-scale sales could push up Treasury yields and raise the cost of servicing the United States' $39 trillion debt. Some analysts have warned that expanding FIMA, which was designed to manage financial crises rather than fund currency interventions, could encourage speculators to test the two countries' resolve, and that any change to the Fed's tools would ultimately require approval from the central bank's Federal Open Market Committee.