Bessent Warns BOJ on Yen Volatility Ahead of Rate Decision

US Treasury Secretary Scott Bessent has urged Japan's central bank to maintain sound monetary policy and avoid excessive yen volatility, which he believes is driving domestic inflationary pressures. In a meeting with Bank of Japan Governor Kazuo Ueda at the G20 finance ministers' and central bank governors' meeting in Asheville, North Carolina, Bessent expressed strong support for Japan's efforts to address the yen's undervaluation.

The weak yen has increased import prices and broader inflation, raising the cost of living for Japanese households. Bessent stressed the importance of proper formulation and communication of monetary policy to anchor inflation expectations and avoid excess exchange rate volatility.

The comments strengthen expectations for the BOJ to raise borrowing costs at its September 17-18 meeting. A weak yen has increased import prices and broader inflation, raising the cost of living for Japanese households.