Bessent Backs Ueda: BOJ Governor Will 'Do What Is Best' for Japan

US Treasury Secretary Scott Bessent is confident that Bank of Japan (BOJ) governor Kazuo Ueda will make the right decision for Japan's economy. In an interview with public broadcaster NHK, Bessent said he believes Ueda 'will do what is best'.

Bessent attributed some of Japan's inflation to the weak yen and energy prices. He predicted that as energy prices come down and the excessive yen weakness is fixed, Japan's inflation will slow, allowing the country and its currency to enter a 'virtuous cycle'. This could increase the likelihood of an interest rate hike by the BOJ at its next policy meeting on September 17 and 18.

Bessent also discussed the recent joint yen-buying intervention between Japan and the US. He said the move was aimed at preventing the yen's weakness from spreading instability across Asian currencies, such as the Korean won and Chinese yuan.