Bessent Urges Ueda to Hike Rates Amid Yen Volatility

US Treasury Secretary Scott Bessent met with Bank of Japan Governor Kazuo Ueda on Sunday at the G20 finance ministers' and central bank governors' meeting in Asheville, North Carolina.

Bessent urged Ueda to conduct 'sound' monetary policy to anchor inflation expectations and avoid excessive yen volatility. He expressed strong support for Japan's steps to address the yen's undervaluation, which is causing domestic inflationary pressures.

The US Treasury Department said in a statement that Bessent emphasized the importance of sound formulation and communication of monetary policy to prevent excess exchange rate volatility.

Bessent's comments effectively locked the BOJ into raising interest rates this month, with markets already expecting a hike following an increase in its policy rate to 1% in June. The recent joint yen-buying intervention by the US and Japan has failed to put a sustained floor under the sagging currency.