Bessent Sees Strong Yen as BOJ Rate Hike Looms
US Treasury Secretary Scott Bessent believes Japan's government and central bank will take action to boost the yen, which would likely lead to a Bank of Japan interest rate hike in September.
In an interview with CNBC, Bessent stated that he has information the market doesn't have and thinks the Japanese government and BOJ will do what leads to a stronger yen. When asked if this meant raising interest rates, he replied, 'I think the market's pricing that in now.'
The yen gained against the dollar after Bessent's comments, which reinforced dominant market expectations of a BOJ rate hike at its next policy meeting on September 17 and 18.
Bessent had previously met with BOJ Governor Kazuo Ueda and Japanese Finance Minister Satsuki Katayama to discuss monetary policy. He called for further rate hikes and fiscal sustainability, which analysts believe could lead to a stronger yen.