Bessent Backs Ueda on BOJ Rate Hike
US Treasury Secretary Scott Bessent expressed confidence in Bank of Japan Governor Kazuo Ueda's ability to make decisions that benefit the Japanese economy. In an interview with NHK, Bessent said he believed part of Japan's inflation uptick was due to a weak yen and high energy prices.
Bessent stated that as energy prices decline and excessive yen weakness is addressed, Japan's inflation will slow down, allowing the country and its currency to enter a virtuous cycle. This comes after a series of comments from Bessent calling for higher Japanese interest rates.
The remarks increase the likelihood of an interest rate hike by the BOJ at its next policy meeting on September 17 and 18. Japan and the US recently launched a joint yen-buying intervention, aiming to stabilize the currency, which has fallen to 40-year lows.