Bessent Issues Yen Trader Warning Ahead of BOJ Rate Decision

US Treasury Secretary Scott Bessent has issued a warning to yen traders, suggesting that his coordination with Japanese officials gives him valuable insight into future Bank of Japan decisions.

Bessent's remarks aim to discourage traders from rebuilding short-yen positions. The US authorities have already joined Japan in purchasing yen on July 31, the first American intervention in support of the Japanese currency in three decades.

The BOJ is leaning toward raising its benchmark interest rate by 25 basis points on September 18, which could provide fundamental support for the yen's strength. Higher Japanese interest rates would improve the yen's yield appeal and reduce the need for repeated currency intervention.