Bessent Pushes BOJ Chief for Rate Hike to Combat Weak Yen

U.S. Treasury Secretary Scott Bessent has urged Bank of Japan Governor Kazuo Ueda to take decisive monetary steps to combat the weak yen, in a meeting held on Sunday at the G20 finance ministers' and central bank governors' meeting in Asheville, North Carolina.

The remarks by Bessent, which were made public on Tuesday, emphasize the importance of sound monetary policy to anchor inflation expectations and avoid excessive yen volatility. The Treasury Department stated that Bessent expressed strong support for Japan's decisive market and monetary steps to address the substantial undervaluation of the yen and its contribution to domestic inflationary pressures in Japan.

The weak yen has pushed up import prices and broader inflation, causing headaches for Japanese policymakers by increasing households' cost of living. The U.S. 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.