Bessent Warns Japan: Maintain Sound Policy to Tame Yen Volatility

US Treasury Secretary Scott Bessent has called on Bank of Japan Governor Kazuo Ueda to maintain sound monetary policy and avoid excessive yen volatility, according to a statement from the Treasury Department.

The comments were made during a meeting between Bessent and Ueda at the G20 finance ministers' and central bank governors' meeting in Asheville, North Carolina, which took place on Sunday.

Bessent expressed strong support for Japan's efforts to address the yen's undervaluation, highlighting its contribution to domestic inflationary pressures. He stressed the importance of proper formulation and communication of monetary policy to anchor inflation expectations and prevent excess exchange rate volatility.

The BOJ is expected to raise borrowing costs at its September 17-18 meeting in response to Bessent's comments, which strengthen expectations for a rate hike.