Bessent's Yen Confidence: Why the U.S. Treasury Chief Sees Tokyo Delivering a Stronger Currency
Bessent said markets are pricing in a September rate hike as the weak yen lifts import prices and inflation pressures in Japan.
- On Monday, Treasury Secretary Scott Bessent signaled that Japan's government and central bank will act to strengthen the yen, reinforcing market expectations for a Bank of Japan interest rate hike in September.
- The US dollar traded near 160 yen, heightening intervention concerns, while Bessent previously told Reuters he expects BOJ Governor Kazuo Ueda to "do the right thing" regarding monetary policy to combat currency declines.
- Sources indicate the Bank of Japan plans to raise rates at the September 17-18 meeting, with analysts suggesting this could signal a shift toward quarterly increases rather than the current pace.
- The yen strengthened following Bessent's comments; however, he told Reuters he does not see recent moves as disorderly, suggesting Washington is unlikely to join Tokyo for another joint intervention like the one on July 31.
- Japan's central bank raised rates in June as policymakers remain determined to prevent currency volatility from pushing up import prices and inflation, core challenges driving policy decisions.
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The secretary of the Treasury and the Japanese finance minister discussed in Asheville the stability of the yen following the joint action in July.The meeting also included the governor of the Japanese central bank, highlighting the need for a firm fiscal commitment.
US Treasury’s Bessent calls on Japan to boost yen through interest rate hikes
US Treasury Secretary Scott Bessent says he believes Japan’s government and central bank will take action that leads to a stronger yen, signalling a strong chance of a Bank of Japan (BOJ) interest rate hike in September. The remarks to CNBC on Monday followed those by Bessent a day earlier, when said he expected BOJ Governor Kazuo Ueda to “do the right thing” on monetary policy to combat yen declines. “I have information that the market doesn’t…
The likelihood of a September interest rate hike by the Bank of Japan has increased as U.S. Treasury Secretary Scott Besant forecasts measures to induce a stronger yen. As the yen continues to weaken despite joint intervention by the U.S. and Japan, Japan is considering adjusting the pace of further interest rate hikes.
(Washington = Yonhap News) Correspondent Park Sung-min = U.S. Treasury Secretary Scott Besant said on the 31st (local time), regarding the Japanese yen weakening again, "the Japanese government and ..."
Bessent's Yen Confidence: Why the U.S. Treasury Chief Sees Tokyo Delivering a Stronger Currency
U.S. Treasury Secretary Scott Bessent says he possesses private information that Japan and the BOJ will act to strengthen the yen, boosting the currency after his comments. One month after rare joint intervention, he now calls recent moves contained and expects BOJ Gov. Ueda to deliver tighter policy as Abenomics ends. Markets price in a September rate hike.
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