Bessent Pressures Japan to Rein in Spending and Raise Rates Amid Yen Decline

U.S. Treasury Secretary Scott Bessent privately pressed Japan's government to scale back its massive budget spending and raise interest rates to support the yen, according to a confidential call in June.

The phone call came as the Japanese currency faced a sharp decline, intensifying concerns about inflation.

Bessent urged Finance Minister Satsuki Katayama and other officials to rein in large-scale budget programs and warned against any 'inconsistency' between fiscal and monetary policy.

Japan's government feared that the yen's depreciation would hurt Prime Minister Sanae Takaichi's standing with voters, but Bessent was more concerned about a potential sell-off in Japanese government bonds, which could push up yields on U.S. Treasury securities and increase borrowing costs for the United States.