Bessent says yen moves ’pretty contained’ and not disorderly

U.S. Treasury Secretary Scott Bessent stated on Sunday that recent movements in the yen have been "pretty well contained," indicating that the recent drops in the Japanese currency's value are not considered disorderly. This comes after the yen fell below the 160-per-dollar mark on Friday, a level that often signals a potential intervention by Japan and the United States.

In an interview with Reuters, Bessent also expressed his confidence in Bank of Japan Governor Kazuo Ueda and Prime Minister Sanae Takaichi to make the right decisions regarding monetary policy, specifically when asked about the possibility of further interest rate hikes to counteract yen declines. Bessent did not advocate for more aggressive rate hikes, stating that he believes Japan has likely reached the end of Abenomics, a policy launched by former Prime Minister Shinzo Abe in 2013 to stimulate the Japanese economy.

Bessent is set to meet with Ueda at the Group of 20 finance leaders' meeting in Asheville, North Carolina. When asked about the disorderly nature of the yen's decline, Bessent firmly stated that it has been contained, emphasizing that Japan has moved beyond deflation and is now transitioning to a new economic policy, dubbed "Takaichi-nomics" under Prime Minister Sanae Takaichi.

This new approach is reportedly more shareholder-friendly, featuring significant deregulation in the workforce and less government intervention. Bessent also commented on Japan's fiscal policy, suggesting that it should simply "sit back and enjoy the success of Abenomics" and allow it to continue running.