U.S. Treasury Secretary Besant promoted a strong dollar policy on Wednesday. His comments provided support for the U.S. currency just one day after President Trump's remarks had triggered a sharp decline in the dollar. In an interview, Besant stated, "The United States has always pursued a strong dollar policy," but added, "A strong dollar policy means establishing the right fundamentals." He elaborated, "If we have sound policies, capital will naturally flow in." Besant also affirmed that the U.S. is "absolutely not" intervening in currency markets to sell dollars and buy yen. When questioned about the potential for such measures, he declined to comment further, saying only, "Beyond reiterating that we have a strong dollar policy, we do not comment."

His remarks spurred a broad-based dollar rebound on Wednesday; however, by Thursday's early Asian trading session, some of those gains had eroded, with the Bloomberg Dollar Spot Index falling 0.2%. This followed a significant drop in the index on Tuesday, which was prompted by Trump expressing his satisfaction with currency depreciation. "Besant appears to be trying to calm market anxieties," noted Sonia Marten, Head of FX and Monetary Policy at DZ Bank. "While the U.S. may generally welcome a weaker dollar, rapid currency depreciation is clearly not in its interests either." Macro strategist Tatiana Darie observed, "Following the historic dollar sell-off triggered by President Trump's comments last night, Treasury Secretary Besant's measured wording seems aimed at soothing the market, but it is unlikely to significantly alter the dollar's bearish trajectory."

Speculation that the U.S. might join Japan in selling dollars and buying yen surged last Friday. This was preceded by the New York Federal Reserve Bank, acting as the Treasury's agent, conducting so-called "rate checks" on the currency pair. Following Besant's comments on the foreign exchange market, the yen fell sharply. The yen has been trending lower with volatility since October, hitting its lowest level since 1986 earlier this month. The yen's decline coincides with investor concerns regarding Prime Minister Natsuo Yamaguchi's stance—she continues to support large-scale fiscal stimulus despite the country's heavy national debt burden. Japanese authorities have repeatedly warned they are prepared to act against the yen's weakness. "We will continue to respond appropriately to forex moves while maintaining close coordination with U.S. authorities as needed," Japanese Finance Minister Tsuyoshi Katayama told reporters late Tuesday.

J.P. Morgan FX strategist Pat Locke commented, "Besant's remarks on non-intervention do not rule out the possibility of further verbal intervention or even actual intervention, even though he reiterated a core stance that, in the long run, getting the fundamentals right is key for foreign exchange—this applies not just to the U.S. but broadly to Japan as well." Besant also stated on Wednesday that the contraction of the U.S. trade deficit should, over time, automatically strengthen the dollar. Even so, economists point out that shifts in trade balances do not necessarily translate directly into currency movements. For instance, China's trade surplus soared to a record $1.2 trillion last year, yet the Renminbi depreciated against most major currencies. Theoretically, a weaker currency can enhance a country's export competitiveness. Besant concluded, "I believe that with President Trump, the 'Great Beautiful Act,' and our regulatory policies, we are making this the best place to build a business, offering tax certainty, regulatory certainty, and energy certainty."