Bessent Comments Send USD/JPY Tumbling Towards 160 Level

USD/JPY has settled near the 160 level after U.S. Treasury Secretary Scott Bessent's comments on Japan's economic policies.

Bessent expressed confidence in the Japanese government and Bank of Japan (BOJ) supporting a stronger yen, hinting at potential intervention or other measures to keep USD/JPY below 160.

Markets are awaiting comments from Japanese officials at the G20 and expecting the BOJ to tighten its monetary policy, which could lead to a recovery in the undervalued yen.

However, options markets suggest that any yen recovery is more likely against the euro than the dollar if U.S. inflation remains elevated.