Bessent Pressures BOJ to Hike Rates Against Weakening Yen

US Treasury Secretary Scott Bessent has urged Japan's central bank, the Bank of Japan (BOJ), to take decisive monetary steps to combat the weak yen. In a meeting with BOJ Governor Kazuo Ueda at the G20 finance ministers' and central bank governors' meeting in Asheville, North Carolina, Bessent emphasized the importance of sound formulation and communication of monetary policy to anchor inflation expectations and avoid excessive yen volatility.

Bessent's comments come as Japan struggles with rising import costs due to a weak yen, which has pushed up prices and added to domestic inflationary pressures. The US joined Japan in a rare joint yen-buying intervention on July 31, signaling their determination to prevent a selloff in the yen and Japanese government bonds from spilling over into global markets.

The BOJ is widely expected to lift rates in September as inflation pressures grow, and Bessent's comments have effectively locked the bank into doing so. A recent spike in wholesale inflation has added to price pressures, and a hike in September rather than October could fuel market bets that the BOJ will raise rates once every quarter.