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

U.S. Treasury Secretary Scott Bessent urged Bank of Japan Governor Kazuo Ueda to carry out prudent monetary policy to stabilize inflation expectations and prevent excessive fluctuations in the yen's value, according to the Treasury Department. In a meeting during the G20 finance ministers and central bank governors gathering in Asheville, North Carolina, Bessent advocated for a Japanese rate increase during their September 17-18 meeting, reinforcing the need for such a move.

He also backed Japan's measures to tackle the yen's undervaluation and highlighted how the weakened currency is fueling inflation domestically. The weak yen has caused import prices and overall inflation to rise in Japan, posing challenges for policymakers in managing citizens' cost of living. Although the U.S. joined Japan in a limited yen-buying intervention in July, the action has not effectively stabilized the currency and has raised doubts about whether the countries will intervene again.

Bessent, however, told Reuters that recent yen movements were not disorderly and urged the BOJ to raise interest rates, signaling his confidence that Ueda will take appropriate action to counteract the yen's decline.