Bessent's Rate Hike Comments Keep Yen Near 160

The yen held steady near its recent high of 160 per dollar on Tuesday after US Treasury Secretary Scott Bessent expressed confidence in an imminent Bank of Japan rate hike.

Bessent's comments, made during a Group of 20 finance leaders' gathering, added to expectations that the BOJ will raise rates later this month. Markets are already pricing in a 73% chance of a hike from the BOJ in September.

However, analysts suggest there needs to be a more significant follow-through by the central bank for the yen to sustainably move away from its current level. 'For the yen, a September BOJ hike is already heavily anticipated,' said Charu Chanana, chief investment strategist at Saxo. 'With US yields still high and rising oil worsening Japan's terms of trade, the yen probably needs a more hawkish BOJ path beyond September, not just one hike, to sustainably move away from 160.'