Bessent Pushes BOJ for Rate Hike to Combat Weak Yen
US Treasury Secretary Scott Bessent urged Bank of Japan Governor Kazuo Ueda to take decisive monetary steps to combat yen weakness during their meeting 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. He also expressed strong support for Japan's decisive market and monetary steps to address the substantial undervaluation of the yen, which has contributed to domestic inflationary pressures in Japan.
The Treasury Department statement said that Bessent expected Ueda to 'do the right thing' to combat yen declines, implying a rate hike at the BOJ's next meeting on September 17-18. This would follow an increase in its policy rate to a 31-year high of 1% in June.
Recent yen moves have failed to put a sustained floor under the sagging currency, heightening market attention to whether the two countries can intervene again in the market. The US and Japan joined forces for a rare joint yen-buying intervention on July 31, but it has not had a lasting impact on stabilizing the currency.