Bessent's Yen Intervention: A Tense Balance of Economic Power

U.S. Treasury Secretary Scott Bessent has been using his leverage to push Japan to rein in its massive fiscal spending and raise interest rates, according to sources familiar with the situation.

In a June phone call with Japanese Finance Minister Satsuki Katayama, Bessent repeated his earlier calls for Japan to overhaul its spending policies, which he felt undermined the Bank of Japan's efforts to combat inflation. He urged Tokyo to address fundamental factors driving down the yen and avoid any inconsistency between monetary and fiscal policies.

The call helped set the stage for a massive joint intervention by Washington and Tokyo in late July, with Bessent pushing for policy concessions from Japan as part of the agreement.