Bessent Backs BOJ Rate Hike to Strengthen Yen
US Treasury Secretary Scott Bessent expressed strong support for Japan's monetary policy actions to address yen weakness, according to a recent statement from the US Treasury. This backing comes ahead of the Bank of Japan's (BOJ) upcoming interest-rate decision on September 18.
Bessent met with BOJ Governor Kazuo Ueda in Asheville, North Carolina, where they discussed Japan's economic situation and the impact of yen weakness on inflation pressure. Bessent emphasized the importance of setting monetary policy appropriately and communicating with markets to anchor inflation expectations and avoid excessive foreign-exchange volatility.
Markets have taken Bessent's remarks as a strong signal in favor of a BOJ rate hike, with the probability implied by overnight index swap (OIS) pricing rising to around 99% for September 18. This is more than double the level seen a month ago.