Bessent Reiterates Expectations of BOJ Rate Hike in September
US Treasury Secretary Scott Bessent's comments at the G20 finance leaders' meeting in Asheville, North Carolina have reinforced market expectations of a Bank of Japan rate hike in September. Bessent stated that he believes Japan's government and central bank will take action to strengthen the yen, echoing his previous remarks made to Reuters on Sunday.
The yen has strengthened against the dollar following Bessent's comments, with USDJPY sitting at 159.75, close to the 160 level seen as increasing the likelihood of yen-buying intervention from Japanese authorities. A senior US Treasury official confirmed that Bessent met with BOJ Governor Kazuo Ueda on Sunday and Japan's Finance Minister Satsuki Katayama on Monday to press for further rate hikes and clearer fiscal sustainability plans from Japan.
Bessent's comments have been cited as one of the factors pushing markets to nearly fully price in a September hike. Sources have previously told Reuters that the BOJ is positioned to raise rates at its next policy meeting, with some analysts suggesting that a hike delivered in September could fuel expectations of a quarterly hiking cadence going forward.