Yen Breaks 160 Again Amid Speculation Over Market Intervention

The yen has broken through the 160 level again, sparking speculation about market intervention. U.S. Treasury Secretary Bessent spoke out to reassure markets that the situation is under control and differs from the disorderly conditions that triggered joint intervention last month.

Bessent stated that recent yen movements have been largely contained and do not constitute the disorderly conditions that previously prompted action. He expressed confidence in Bank of Japan Governor Kazuo Ueda, saying he believes Ueda will 'do the right thing' regarding monetary policy.

The strengthening U.S. dollar has pushed the yen past the 160 mark, prompting expectations for intervention to rise. However, Bessent's remarks have somewhat eased market expectations for immediate intervention, but also signal deeper policy shifts. He pointed out that Japan's 'Abenomics' era has come to an end and the Japanese economy is transitioning to a new stage characterized by greater market orientation.

Bessent will meet with Ueda during the G20 finance ministers meeting this week. He praised Ueda, stating he is an outstanding economist and the market underestimates his acumen. Bessent has repeatedly called on the Bank of Japan to raise interest rates to combat inflation and the yen's depreciation.