Bessent Presses BOJ Governor for Decisive Action Against Yen Weakness
US Treasury Secretary Scott Bessent urged Bank of Japan Governor Kazuo Ueda to take decisive action against yen weakness during their meeting at the G20 finance ministers' and central bank governors' gathering in Asheville, North Carolina. The meeting took place on Sunday, September 1.
Bessent emphasized the importance of sound monetary policy formulation and communication to anchor inflation expectations and avoid excessive exchange rate volatility, according to a statement from the Treasury Department. He also expressed strong support for Japan's efforts to address the yen's undervaluation through market and monetary steps.
The BOJ is expected to hike its interest rates at its next meeting on September 17-18, which would follow an increase in its policy rate to a 31-year high of 1 per cent in June. A recent spike in wholesale inflation due to rising import costs from a weak yen has added to price pressures and triggered warnings of an inflation overshoot from the BOJ.
Bessent's comments effectively locked the BOJ into raising rates in September, putting pressure on it to step up hikes going forward. The US joined Japan in a rare joint yen-buying intervention on July 31, but recent yen moves have failed to put a sustained floor under the sagging currency.