The delay is the message. As the U.S. Treasury holds back its Autumn 2025 Foreign Exchange Report amidst a lingering government shutdown, the silence in Washington is deafening for global markets. This is no longer a bureaucratic exercise in spreadsheet auditing. It is a pavement level precursor to a new era of trade enforcement. Under the current administration, being placed on the Monitoring List has shifted from a mere diplomatic nudge to a formal prerequisite for Section 301 tariffs. The data suggests that for nations like Thailand and Vietnam, the grace period for running massive bilateral surpluses while managing currency volatility is over.
The Manipulator Tag Is a Red Herring
Traders obsessed with the official currency manipulator label are missing the structural shift in policy. While ING Economic Research accurately predicts that no major trading partner will meet all three criteria for the June 2024 to June 2025 period, the legal threshold for intervention is being redefined. The Treasury now prioritizes the long lasting damage of past interventions over current spot market activity. This means a country like Switzerland, despite a reduction in active selling of the Franc, remains a target because of its 4.1 percent current account surplus. The Treasury is signaling that once a nation distorts its currency, it owes the global market a period of compensatory appreciation.
The 3 Percent Threshold Trap
Thailand is the next casualty of the 2015 Trade Facilitation and Trade Enforcement Act. Our analysis of the four quarters ending June 2025 shows Thailand has breached the 3 percent of GDP current account surplus threshold, moving from 2.1 percent in 2024 to an estimated 3.2 percent today. This breach, coupled with a bilateral trade surplus exceeding $20 billion, makes its inclusion on the Monitoring List inevitable. The chart below visualizes the current account surplus of key nations relative to the Treasury’s 3 percent threshold as of November 27, 2025.
Japan and the 155.00 Red Line
In Tokyo, the pressure is physical. The USD/JPY pair is hovering at 156.50 as of this morning, according to Reuters FX Market Data. Japanese Finance Minister Satsuki Katayama has issued three urgent warnings in the last 48 hours, describing the move as one sided and rapid. However, the Treasury’s upcoming report will likely criticize Japan’s previous $62 billion intervention in 2024. The U.S. stance is clear: Japan cannot hike interest rates to only 0.75 percent while inflation sits at 2.9 percent and then expect the U.S. to tolerate currency intervention to save the Yen. This creates a policy pincer. Japan must choose between a domestic debt crisis caused by higher rates or a trade war with Washington caused by a weak currency.
The Mechanism of Sterilization
When central banks intervene, they often use sterilization to prevent the domestic money supply from expanding. The Swiss National Bank (SNB) has mastered this, using sight deposits to offset the inflationary impact of its Franc selling. The U.S. Treasury is now looking through these technical maneuvers. The report is expected to highlight that sterilization does not negate the trade distorting impact of the intervention itself. This is a direct attack on the SNB’s primary tool for export protection.
China and the Trillion Dollar Surplus
The numbers coming out of Beijing are staggering. China’s trade surplus eclipsed $1 trillion by November 2025, a 20 percent year over year increase from 2024. Despite this, the USD/CNY rate remains artificially stable around 7.30. The People’s Bank of China is utilizing its counter-cyclical factor in the daily fix to prevent the Yuan from reflecting its true market strength. The U.S. Department of the Treasury has repeatedly called for transparency, but the Autumn report is expected to go further, explicitly linking China’s lack of transparency to the potential for new tariffs under the Mar-a-Lago trade framework.
| Country | Trade Surplus (USD bn) | Current Account (%) | FX Intervention Status |
|---|---|---|---|
| China | 1,020 | 2.5 | Indirect Management |
| Japan | 82 | 3.5 | High Risk |
| Switzerland | 24 | 4.1 | Persistent |
| Thailand | 19 | 3.2 | Newly Breached |
Market participants must prepare for the release of the Tokyo CPI figures tomorrow, November 28. If inflation remains sticky above 2.8 percent, the Bank of Japan will be forced to choose between an emergency rate hike in December or watching the Yen slide past 160.00, an event that would almost certainly trigger a harsh response in the Treasury’s final report. Watch the 4.14 percent level on the U.S. 10-year Treasury yield; if it climbs, the pressure on the G10 currencies will reach a breaking point before the year ends.
