Yen Stabilizes near 160 as Bessent Pressures BOJ to Hike Interest Rates

The Japanese yen held steady near 160 per dollar on Tuesday after US Treasury Secretary Scott Bessent urged the Bank of Japan to raise interest rates this month, while a bond selloff following renewed Gulf attacks left investors cautious.

US President Donald Trump threatened further strikes against Iran, and the resulting attacks sent Brent crude futures above $91 a barrel, sparking a bond selloff. The yield on 10-year Treasury notes hit its highest since January 2025, while the 10-year Japanese government bond yield touched 3% for the first time in 30 years.

Bessent told CNBC that he believed Japan's government and central bank would take action to lead to a stronger yen, but analysts suggest there needs to be a more hawkish BOJ path beyond September to sustainably move away from 160. Markets are pricing in a 73% chance of a hike from the BOJ later this month.