Bessent Urges BOJ to Hike Rates to Combat Yen Weakness

US Treasury Secretary Scott Bessent urged Bank of Japan Governor Kazuo Ueda to take decisive monetary steps to combat yen weakness in a meeting on Sunday. The two officials met at the G20 finance ministers' and central bank governors' meeting in Asheville, North Carolina.

Bessent emphasized the importance of sound formulation and communication of monetary policy to anchor inflation expectations and avoid excess exchange rate volatility, according to the Treasury Department. He also expressed strong support for Japan's decisive market and monetary steps to address the substantial undervaluation of the yen.

The remarks bolster the case for a Japanese rate hike at its next meeting on September 17-18. A recent spike in wholesale inflation, due in part to rising import costs from a weak yen, has added to price pressures and triggered warnings of an inflation overshoot from the BOJ.