Overview

Citi Research published a note on 31‑08‑2026 examining whether global foreign‑exchange (FX) policy is undergoing a shift comparable to the 1985 Plaza Accord, as US Treasury Secretary Scott Bessent pursues interventions that many view as controversial. While Citi finds “no confirmation for the start of a structural turning point,” it highlights a nascent currency alliance between the United States and Japan aimed at reversing Japanese yen (JPY) weakness.

Coordinated Yen Intervention

In late July, the US Treasury joined Japan in a coordinated market intervention after the USD/JPY pair approached a 40‑year high of approximately ¥164 per dollar. Bessent directed the Treasury’s Exchange Stabilization Fund (ESF) to deploy foreign‑currency assets to purchase yen. He later clarified that the operation relied on existing ESF assets, reportedly including euros, and did not extend credit to Japan.

Potential Expansion of the Alliance

Citi posits that if the reversal of JPY weakness also prompts a correction in Chinese yuan (CNY) weakness, European nations could join the United States in urging China to halt CNY depreciation. However, Citi cautions that JPY weakness is largely driven by yen‑selling hedges linked to the stock‑market rally, which may impede authorities’ corrective efforts.

The “Bessent Doctrine”

The interventions are framed within a broader “national economic policy” proposed by Secretary Bessent, dubbed the “Bessent doctrine.” The doctrine emphasizes 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 US workers

While distinct from the “Mar‑a‑Lago accord” suggested by Stephen Miran, both policies share the goal of addressing global imbalances symbolised by the US current‑account deficit.

Implications for the US Dollar and Global FX Landscape

Citi asserts that the recent interventions do not signal a weakening of the US dollar. Instead, the actions resemble a “mini‑accord” between the US and Japan intended to avert a potential financial crisis originating in Japan. The firm foresees that future steps could involve additional nations, with particular focus on China’s current‑account position and the CNY problem. Should JPY strength translate into further CNY appreciation, European participation in a US‑Japan “currency alliance” would not be surprising.

Conclusion

The article underscores that, although coordinated US‑Japan FX actions have materialised, the broader emergence of a “Bessent doctrine” in global currency policy remains speculative, with significant obstacles such as market‑driven yen‑selling hedges and the need for multilateral cooperation.