US-Japan Rift Over BOJ Policy Sparks Yen Slump

The US and Japan are at odds over the Bank of Japan's (BOJ) monetary policy, which has significant implications for the Japanese yen. US Treasury Secretary Scott Bessent favors rate hikes to support the yen, but Japanese Prime Minister Sanae Takaichi has resisted aggressive tightening, citing concerns about protecting growth. The disagreement follows the BOJ's decision last month to hold interest rates steady, which has led to a decline in the yen's value.

Since then, the currency has slipped back towards ¥160 per dollar, sparking concerns that the BOJ may eventually raise interest rates. Markets are now looking at a possible rate hike in September or October.