Bessent Presses Japan on Fiscal Discipline and Higher Interest Rates

Treasury Secretary Scott Bessent has been pushing Japan to rein in its massive fiscal spending and allow the Bank of Japan to raise interest rates, according to three people familiar with the situation.

Bessent's efforts began when Japanese Finance Minister Satsuki Katayama called him for help to support the cratering yen in June. Instead of offering assistance, Bessent urged Japan to address fundamental factors driving down the yen, including its big spending plans.

Katayama's call for Washington's help in a coordinated yen-buying spree allowed Bessent to press his case. He repeated his earlier calls for Japan to overhaul spending that undermined the BOJ's efforts to rein in inflation.

The June 22 call helped set the stage for massive joint intervention by Washington and Tokyo in late July, according to the people who spoke on condition of anonymity.