Bessent's Comments Lock in BOJ Rate Hike for September

U.S. Treasury Secretary Scott Bessent's recent media appearances have effectively locked in an interest rate hike at Japan's Bank of Japan (BOJ) September meeting, according to sources close to the matter.

Bessent has been promoting the joint intervention with Tokyo last week as a win for Japan's economy, but his comments have also raised questions about Washington's influence over domestic policy and set a precedent for Japanese monetary policy.

Kazuo Momma, a former BOJ executive and current economist at Mizuho Research Institute, said that while the joint intervention has given the BOJ room to raise rates, this comes with a catch: if the government blocks the hike, it would be an act of betrayal to the U.S.

The BOJ's next rate hike will have significant implications for market perceptions on borrowing costs and could affect the timing of future hikes. Analysts polled by Reuters expect the BOJ to raise rates again by December, possibly as soon as October.