Bessent: Japan does not owe any debt to the U.S. Treasury, and the same logic applies to Argentina.

The US Treasury Secretary Yellen sent a letter to Senator Warren explaining that the US Treasury used existing foreign currency assets from the Exchange Stabilization Fund to carry out the yen swap. This operation did not use newly approved congressional appropriations, nor did it provide credit support to Japan. Japan owes nothing to the Treasury, so there is absolutely no risk of Japan being unable to repay a debt that does not exist in the first place.In response to the question of "it is still unclear what benefits resolving the turmoil in the Japanese market brings to the United States", Yellen mentioned in the letter that Japan is a major holder of US Treasury securities as well as an important US trading partner and treaty ally. If the yen market experiences disorderly and sharp fluctuations, it could trigger forced liquidations, which may disrupt the normal functioning of global markets and ultimately increase borrowing costs for American households and businesses.The same logic applies to Argentina. Previously, when Argentina encountered a severe short-term liquidity crisis, the Treasury used the Exchange Stabilization Fund to help stabilize the situation and prevent the crisis from further spreading into a broader regional crisis. The most ideal outcome in crisis response is to stop the crisis at its source.