Background

The Reuters article dated 31‑08‑2026, authored by Rachael Rajan, examines whether a new global foreign‑exchange policy framework—dubbed the “Bessent doctrine”—is emerging under U.S. Treasury Secretary Scott Bessent. Citi Research issued a note questioning if the current actions resemble a structural shift comparable to the 1985 Plaza Accord.

Coordinated Yen Intervention

In late July 2026, the U.S. Treasury, acting on Bessent’s direction, joined Japan in a coordinated market intervention aimed at supporting the Japanese yen after the USD/JPY pair approached a 40‑year high of approximately ¥164 per dollar. The Treasury employed foreign‑currency assets held in the Exchange Stabilization Fund (ESF) to purchase yen. Bessent later clarified that the operation utilized existing ESF holdings—including euros—and did not involve extending new credit to Japan.

Citi’s Assessment of the Intervention

Citi Research stated that, while there is no confirmation of a structural turning point, the U.S.–Japan currency alliance intended to reverse yen weakness could be interpreted as a sign of change in global FX policy. The firm highlighted that yen weakness is largely driven by yen‑selling hedges linked to the stock‑market rally, which it views as a significant obstacle to successful correction.

The “Bessent Doctrine”

The article describes a new “national economic policy” proposed by Secretary Bessent, referred to as the Bessent doctrine. The doctrine is built around five pillars:

1. Economic security

2. Mutual free trade

3. New rules for the next‑generation economy

4. Advantage in financial power

5. Greater benefits to U.S. workers

Citi notes that this framework differs from the “Mar‑a‑Lago accord” proposed by Stephen Miran, though both share the overarching goal of addressing global imbalances symbolised by the United States’ current‑account deficit.

Potential Wider Implications

Citi does not anticipate an immediate weakening of the U.S. dollar as a result of the interventions. However, it suggests that the emerging “mini‑accord” between the United States and Japan—intended to avert a financial crisis that could originate in Japan—might lead to additional coordinated actions involving other nations. The firm foresees the focus shifting toward the Chinese current‑account situation and the CNY exchange‑rate issue. It adds that if the reversal of yen weakness also strengthens the yuan, European nations could plausibly join the U.S.–Japan “currency alliance” to press China to halt CNY depreciation.

Conclusion

The article concludes that while the current interventions do not constitute a definitive shift in global FX policy, they may lay the groundwork for a broader, multilateral framework—potentially involving Europe—that targets currency imbalances, particularly concerning the Japanese yen and Chinese yuan.