Bessent expects Japan to act on yen, signals strong chance of BOJ September rate hike
U.S. Treasury Secretary Scott Bessent stated he expects Japan’s government and central bank to take actions strengthening the yen, signaling a strong chance of a Bank of Japan interest rate hike at its September 17-18 meeting. The yen rose against the dollar following his comments, with the dollar trading at 159.73 yen. Sources indicate the BOJ may hike rates more aggressively than the current pace of roughly two times per year. Japan and the U.S. conducted a rare joint yen-buying intervention on July 31.
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Treasury Secretary Bessent meets BOJ Governor Ueda, stresses monetary policy coordination
On Sunday, August 30, U.S. Treasury Secretary Scott Bessent met with Bank of Japan Governor Kazuo Ueda on the sidelines of the G20 Finance Ministers and Central Bank Governors Meeting in Asheville, North Carolina. According to a Treasury statement, Secretary Bessent welcomed Governor Ueda's participation and emphasized the importance of close U.S.-Japan coordination on shared macroeconomic priorities. He stressed the need for sound formulation and communication of monetary policy to anchor inflation expectations and avoid excessive exchange rate volatility. Secretary Bessent also expressed strong support for Japan's decisive market and monetary steps to address the substantial undervaluation of the yen, noting that yen weakness has contributed to domestic inflationary pressures in Japan.
Bessent comments lock BOJ into September rate hike, pressure for more
The Bank of Japan (BOJ) was already widely expected to raise interest rates in September due to growing inflation pressures. However, US Treasury Secretary Scott Bessent's public comments expressing hope that BOJ Governor Kazuo Ueda would 'do the right thing' have effectively locked the bank into following through with the hike. Furthermore, Bessent's remarks are seen as putting additional pressure on the BOJ to accelerate the pace of rate increases going forward. The post, shared by ReutersBiz, highlights the influence of US official commentary on Japanese monetary policy decisions.
US Treasury Secretary Bessent Tells Japan to Raise Interest Rates, NHK Reports
US Treasury Secretary Scott Bessent has told Japanese Finance Minister Satsuki Katayama and Bank of Japan Governor Kazuo Ueda that Japan's next policy step should be to raise interest rates, according to a report by Japanese public broadcaster NHK. The report, citing an interview with a US official, indicates direct high-level communication between the United States and Japan on monetary policy direction. This recommendation comes as the Bank of Japan has been gradually moving away from its long-standing ultra-loose monetary policy, having raised rates in recent months for the first time in years. The US Treasury Secretary's public suggestion represents a notable intervention in another country's monetary policy, underscoring the close economic coordination between the two allies. The statement may influence market expectations regarding the pace and timing of future BOJ rate hikes, as Japan continues to navigate inflation and yen volatility.
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Bessent expects Japan to take action to boost yen, signals BOJ rate-hike chance
U.S. Treasury Secretary Scott Bessent said he believes Japan's government and central bank will take action leading to a stronger yen, signaling a strong chance of a Bank of Japan interest rate hike in September. In an interview with CNBC during a G20 finance leaders' gathering in Asheville, North Carolina, Bessent stated he has information the market lacks and expects Japanese authorities to do what strengthens the yen. When asked if that meant raising rates, he said the market is pricing that in. The yen gained against the dollar after his comments, reinforcing market expectations of a BOJ rate hike at its September 17-18 meeting. Sources told Reuters the BOJ is set to raise rates as soon as that meeting and may hike more aggressively than the current pace of roughly two times per year. A weak yen has pushed up import prices and inflation in Japan, partly blamed on slow BOJ rate hikes keeping the rate divergence with the U.S. wide. Japan and the U.S. conducted a rare joint yen-buying intervention on July 31, though Bessent said he did not see recent yen moves as disorderly.
Bessent expects Japan to act on yen, signals BOJ rate hike chance in September
U.S. Treasury Secretary Scott Bessent said he expects Japan's government and central bank to take actions that will strengthen the yen, signaling a strong chance of a Bank of Japan interest rate hike at its September 17-18 meeting. In an interview with CNBC during a G20 finance leaders' gathering in Asheville, North Carolina, Bessent stated he has information the market lacks and believes Japanese authorities will do what is needed to boost the yen. When asked if that meant raising rates, he said the market is pricing that in. The yen rose against the dollar following his comments, with the dollar trading at 159.73 yen, near the 160 threshold that could trigger yen-buying intervention. Bessent had previously told Reuters he expects BOJ Governor Kazuo Ueda to 'do the right thing' on monetary policy. Sources indicate the BOJ is considering hiking rates more aggressively than the current pace of roughly two times per year. Japan and the U.S. conducted a rare joint yen-buying intervention on July 31, though Bessent said he does not view recent yen moves as disorderly.