Bessent Predicts BOJ Rate Hike to Strengthen Yen

US Treasury Secretary Scott Bessent believes that Japan's government and central bank will take action to strengthen the yen. In an interview with CNBC, Bessent stated that he has information not yet available to the market, and his belief is that the Japanese government and Bank of Japan (BOJ) will implement policies leading to a stronger yen.

When asked if this meant raising interest rates, Bessent replied, 'I think the market's pricing that in now.'

The yen has gained against the dollar since Bessent's comments, reinforcing market expectations for a BOJ rate hike at its next policy meeting on September 17-18. The dollar stood at 159.73 yen on Monday.

Bessent's repeated calls for BOJ rate hikes have been among the factors leading markets to nearly fully price in the chance of a September hike. Some analysts believe that a hike next month could fuel market bets for quarterly rate increases, rather than the current pace of roughly two times a year after the September meeting.