Bessent Pushes BOJ for Rate Hike, Yen Holds Near 160
The yen hovered near 160 per dollar on Tuesday after U.S. Treasury Secretary Scott Bessent urged the Bank of Japan to raise rates this month.
Bessent's comments came as investors became cautious following a bond selloff triggered by renewed Gulf attacks, which sent Brent crude futures above $91 a barrel and pushed 10-year Treasury yields to their highest since January 2025.
The yen had weakened past the 160 level in the two previous sessions but firmed after Bessent said he believed Japan's government and central bank would take action leading to a stronger yen, citing 'information that the market doesn't have'.
Despite this, analysts are skeptical about a September BOJ rate hike, with Saxo's Charu Chanana saying 'a September BOJ hike is already heavily anticipated' but adding that 'the yen probably needs a more hawkish BOJ path beyond September, not just one hike, to sustainably move away from 160'. The U.S. dollar was subdued, backing away from Friday's gains as investors contended with rising odds of a hike from the Federal Reserve in September.