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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BOJ Favors Quarter-Point Rate Hike, Open to Faster Future Hikes
The Bank of Japan (BOJ) is leaning toward raising its benchmark interest rate by a quarter point at its September 18 meeting, according to people familiar with the matter. Officials see inflation risks as skewed to the upside due to rising service prices and a weak yen, strengthening the case for action. A larger half-point hike is considered unlikely. The BOJ remains flexible on the pace of future rate increases, potentially accelerating if conditions warrant. The decision comes under unusual scrutiny from Washington, as US Treasury Secretary Scott Bessent has publicly urged higher Japanese rates. The yen weakened slightly on the news, trading around 157.08 per dollar. A September hike would mark the shortest interval between rate increases under Governor Kazuo Ueda, following a hike in June. Prime Minister Sanae Takaichi's preference for accommodative policy remains a source of uncertainty for the pace of tightening. Japan's key inflation gauge is expected to head toward 3%.
Bessent urges BOJ chief to combat weak yen with decisive monetary steps
U.S. Treasury Secretary Scott Bessent met with Bank of Japan Governor Kazuo Ueda at the G20 finance ministers' meeting in Asheville, North Carolina, and urged the BOJ to take decisive monetary steps to address the substantial undervaluation of the yen. The Treasury Department stated that Bessent emphasized the importance of sound monetary policy communication to anchor inflation expectations and avoid excessive exchange rate volatility. Bessent expressed strong support for Japan's market and monetary measures to combat yen weakness, noting its contribution to domestic inflationary pressures. The remarks bolster the case for the BOJ to raise interest rates at its September 17-18 meeting, which was already widely expected. A weak yen has pushed up import prices and broader inflation, increasing households' cost of living. The U.S. and Japan conducted a rare joint yen-buying intervention on July 31, but it failed to sustain the currency. Bessent told Reuters that recent yen moves were not disorderly and expected Ueda to do the right thing. A September rate hike would follow an increase to a 31-year high of 1% in June.
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.
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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.
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.