Bessent Backs BOJ Chief's Economic Stance Amid Yen Weakness

U.S. Treasury Secretary Scott Bessent expressed confidence in Bank of Japan Governor Kazuo Ueda's ability to make decisions that benefit Japan's economy. In an interview with NHK, Bessent stated he believes part of Japan's inflation uptick was due to the weak yen and energy prices.

Bessent said that as energy prices decrease and yen weakness is corrected, Japan's inflation will slow down, leading to a 'virtuous cycle' for both the country and its currency. This sentiment follows Bessent's previous comments calling for higher Japanese interest rates.

The remarks have heightened the chances of an interest rate hike by the BOJ at its next policy meeting on September 17 and 18. Bessent had previously stated that he would meet Ueda at a U.S.-hosted G20 finance leaders' meeting before the BOJ's policy meeting.