The Bessent Rebound: US Reaffirms "Strong Dollar" and Rules Out Yen Intervention
On Wednesday, January 28, 2026, U.S. Treasury Secretary Scott Bessent put an abrupt end to days of market fever dreams. Speaking to CNBC, Bessent delivered a clear "No" to the speculation that the U.S. and Japan were planning a coordinated attack on the currency markets.
"Absolutely not," Bessent said when asked if the U.S. was currently intervening to sell the Dollar and buy the Yen. His comments served as a powerful counter-narrative to President Trump’s remarks just 24 hours earlier, where the President had signaled comfort with a weaker greenback. At the GME Academy, we view this as a classic "Policy Re-alignment." For Forex Trading, Bessent’s words provided the floor the Dollar desperately needed after hitting a four-year low.
1. "Absolutely Not": Killing the Intervention Speculation
For the past week, the USD/JPY had been in a tailspin, fueled by reports that the Federal Reserve Bank of New York was conducting "rate checks"—a move that usually happens minutes before a central bank drops billions into the market.
The Bessent Correction:
The Denial: By stating the U.S. is "absolutely not" intervening, Bessent effectively pulled the plug on the "coordinated intervention" trade.
The Reaction: The USD/JPY immediately recovered over 1%, rallying from the 152.00 level toward 153.80 as short-sellers were forced to cover their positions.
Market Impact: The Dollar Index (DXY) posted its biggest one-day gain since November, stabilizing above the 96.00 mark.
2. Defining the "Strong Dollar" for 2026
Bessent didn't just deny intervention; he redefined what a "Strong Dollar Policy" looks like under the current administration.
"A strong dollar policy means setting the right fundamentals," Bessent explained. "If we have sound policies, the money will flow in."
The Fundamentals he cited:
Deregulation & Tax Certainty: Policies like the "One Big Beautiful Bill" are designed to attract global capital.
Trade Deficits: Bessent argued that as the U.S. brings down its trade deficits through tariffs and domestic production, the Dollar should naturally strengthen over time.
The Fed's Role: While acknowledging the Fed's independence by stating the January rate hold was "up to them," Bessent emphasized that the administration's fiscal path is the primary driver of currency strength.
3. The Search for a New Fed Chair: "Four Great Candidates".
The most intriguing part of the interview was Bessent's update on the "Long-Run" leadership of the Federal Reserve. With Jerome Powell's term ending in May, the race to lead the world's most powerful central bank has narrowed to a final four.
Bessent confirmed he had a "long discussion" with President Trump on Air Force One regarding the shortlist. While he didn't name them in the interview, market insiders at Global Markets Eruditio have identified the likely quartet:
Rick Rieder: BlackRock's bond king (the current betting favorite).
Kevin Hassett: Head of the National Economic Council.
Christopher Waller: Current Fed Governor and Trump appointee.
Kevin Warsh: Former Fed Governor with deep crisis experience.
Forex Impact: Trading the "Bessent Floor"
For Forex Trading for Beginners, this week was a lesson in why "Fundamental Sentiment" matters.
Sell the Rumor: Traders sold the USD on Tuesday when Trump said a weak dollar was "great."
Buy the Fact: Traders bought the USD on Wednesday when Bessent reaffirmed the "Strong Dollar Policy."
In the 2026 market, the Treasury Secretary is once again the "adult in the room" for currency stability. As long as Bessent remains the voice of the Treasury, the Dollar is unlikely to be allowed to "freefall," even if the President prefers a more competitive exchange rate for trade.
Master the Art of Central Bank Watching
The "rate checks" and "intervention denials" of January 2026 are exactly how fortunes are made and lost in the FX market. Don't be a spectator to the volatility—be a participant.
Ready to Trade the USD/JPY Rebound? The intervention threat hasn't vanished entirely; it has just moved further down the road. Learn how to spot the real "Rate Check" signals before they hit the headlines.
Join our FREE Forex Workshop. Discover how to navigate the tension between the White House and the Treasury. We’ll show you the "Bessent Strategy" for identifying high-probability long entries on the USD when the market overreacts to political noise.
