Bessent urges BOJ chief to conduct ’sound’ policy to avoid yen volatility

U.S. Treasury Secretary Scott Bessent met with Bank of Japan Governor Kazuo Ueda during the G20 finance ministers’ and central bank governors’ meeting in Asheville, North Carolina. Bessent urged Ueda to adopt sound monetary policy to stabilize inflation expectations and prevent excessive yen volatility, highlighting the need for a potential rate hike by the Bank of Japan this month.

Bessent also expressed strong support for Japan's efforts to address the yen's undervaluation, noting how a weak currency contributes to domestic inflationary pressures. The meeting took place at the conclusion of a two-day G20 finance leaders' meeting. The U.S. and Japan jointly intervened in the yen market on July 31, aiming to prevent a sell-off and protect their bond markets, but the intervention has not sufficiently stabilized the currency.

Despite this, Bessent believes Ueda should increase interest rates to counter the yen's decline, signaling a strong push for the BOJ to follow through with rate hikes at its upcoming meeting on September 17-18.