Bessent Sees BOJ Rate Hike as Likely Path for Stronger Yen

US Treasury Secretary Scott Bessent believes Japan's government and central bank will take action to boost the yen, signaling a strong chance of a Bank of Japan interest rate hike in September. This comes after his previous comments on Sunday, where he expected BOJ Governor Kazuo Ueda to 'do the right thing' on monetary policy to combat yen declines.

Bessent's latest remarks were made during the G-20 finance leaders' gathering in Asheville, North Carolina, and reinforced dominant market expectations that the BOJ will raise rates at its next policy meeting in September. The dollar stood at 159.73 yen on Monday, close to the 160 mark that is seen as heightening the chance of yen-buying intervention.

Bessent's repeated calls for BOJ rate hikes have led markets to nearly fully price in the chance of a September hike, with some analysts predicting a hike next month could fuel market bets that the BOJ will raise rates once every quarter. A weak yen has pushed up import prices and broader inflation, causing headaches for Japanese policymakers.