Bessent Backs Japan's Yen Stabilization Efforts, Expects BOJ Action

U.S. Treasury Secretary Scott Bessent expressed support for Japan's efforts to stabilize the yen, stating that Washington will assist Tokyo in achieving this goal. In an interview with CNBC, Bessent emphasized his confidence in Bank of Japan Governor Kazuo Ueda's ability to take necessary measures, including a possible interest rate hike.

The recent concerted yen-buying foreign exchange market intervention by Japanese and U.S. authorities marks the first such effort in nearly 28 years. The BOJ last raised its target for the unsecured overnight call rate in June, setting it around 1% from approximately 0.75%. Bessent commended Japan's Finance Minister Satsuki Katayama for her efforts to address the yen's substantial undervaluation.

The treasury secretary warned that a stable yen is crucial not only for the U.S. but also for the entire region, as excessive volatility in other currencies, such as the South Korean won, could have significant repercussions.