Bessent Fails to Stabilize Markets, Japan Risks Repeating the 1997 Asian Financial Crisis

A Nomura report suggests that the "Bessent put" is losing its effectiveness. The U.S. Treasury's attempt to cap long-end yields through bond buybacks has not only failed to stabilize the bond market sustainably but has also increased downward pressure on the dollar. The report warns that if Japan follows the U.S. in suppressing long-term financing costs, it may shift pressure onto the foreign exchange market. Given an already weak yen, any policy misstep that triggers capital outflows could even put Japan at risk of repeating the 1997 Asian financial crisis.