Bessent Sees Japan Boosting Yen, Boosts Hike Chances for BOJ

US Treasury Secretary Scott Bessent believes Japan's government and central bank will take action to boost the yen, increasing the chances of a Bank of Japan (BOJ) interest rate hike in September. In an interview with CNBC, Bessent stated that he has information not available to the market, and it is his belief that the Japanese government and BOJ will take steps leading to a stronger yen.

Bessent's comments came after he met with BOJ Governor Kazuo Ueda on August 30 and Japanese Finance Minister Satsuki Katayama on August 31. He called for further rate hikes and clear communication from Japan on achieving fiscal sustainability, according to Erin Browne, undersecretary for international affairs at the US Department of the Treasury.

The yen gained against the dollar after Bessent's comments, which reinforced market expectations that the BOJ will raise rates at its next policy meeting in September. The dollar stood at 159.75 yen on August 31, close to the 160 mark seen as increasing the chance of yen-buying intervention.