Bessent: Japan Conquers Deflation, Moves Towards Takaichinomics

US Treasury Secretary Scott Bessent stated that Japan has defeated deflation and is now moving towards 'Takaichinomics', a shift in economic policy under Prime Minister Sanae Takaichi's government.

Bessent, speaking to Reuters, said the yen's recent weakness is 'pretty contained' and hasn't shown any disorderly moves. The yen fell below 160 per dollar on Friday, August 28, a threshold that could trigger Japanese government intervention to support the currency.

When asked if the Bank of Japan (BOJ) needs to raise interest rates consecutively to address the yen's weakness, Bessent replied, 'I am not going to tell them what to do.'

The BOJ is expected to meet on September 17-18 and may consider raising interest rates in response to the yen's decline. Reuters sources suggest that the BOJ could raise interest rates in September and consider more aggressive increases thereafter than its current pace of around twice a year.