US Treasury Secretary Bessent Backs BoJ Policy on Undervalued Yen

US Treasury Secretary Bessent met with Bank of Japan (BoJ) Governor Ueda, emphasizing the importance of sound monetary policy formulation and communication in anchoring inflation expectations.

Bessent's comments mark a departure from Washington's usual posture on exchange rates, as he publicly framed the yen as substantially undervalued and endorsed Japanese policy steps to address it.

This shift may lower the perceived political cost for the BoJ to further normalize monetary policy and change market pricing of the risk that yen weakness becomes a policy target rather than a byproduct.