Analysis:Japan faces day of policy reckoning as Bessent calls time on big stimulus

Japan is facing a policy reckoning as Treasury Secretary Scott Bessent calls for an end to big stimulus measures, according to the report. The U.S. Treasury official met with Bank of Japan Governor Kazuo Ueda and urged the bank to implement interest rate hikes, signaling that Japan's currency crisis may require assistance from the United States.

The BOJ is expected to raise rates in September due to growing inflation pressures, but Bessent's comments imply that more hikes may be necessary to control a weakening yen. Meanwhile, Prime Minister Sanae Takaichi faces pressure to cut back on her ambitious fiscal expansion plans, known as Abenomics, and avoid excessively expansionary policy.