Bessent Warns Japan to Clearly Present Fiscal Path Amid Weakening Yen
US Treasury Secretary Scott Bessent met with Bank of Japan Governor Kazuo Ueda and Japanese Finance Minister Satsuki Katayama to discuss fiscal sustainability and interest rate hikes in Japan. The meetings took place on August 30 and 31, respectively, during the Group of 20 (G20) Finance Ministers and Central Bank Governors Meeting in Asheville, North Carolina.
Bessent emphasized that it is essential for Japan to clearly present its path toward fiscal sustainability and interest rate hikes to the market. This comes after a large-scale joint yen-buying market intervention by the US and Japanese governments at the end of July, which saw the yen strengthen from around 164 yen per dollar to the 155 yen range.
However, the effect of the intervention has since faded, with the yen briefly climbing back into the 160-yen range. Deputy Under Secretary Erin Brown stated that 'at this point, intervention has its limits,' and that policies are what matter for stabilizing the yen's exchange rate.