BOJ’s balancing act with U.S. Treasury chief Bessent is only going to get harder
Nobody likes a back-seat driver. Bank of Japan Gov. Kazuo Ueda now has two — and they want to move at different speeds.
Bank of Japan Governor Kazuo Ueda has raised interest rates for a second time in three months, pitting him against U.S. Treasury Chief Scott Bessent. Bessent, who arrived in Japan to help shore up the yen, has been urging further monetary tightening. However, Prime Minister Sanae Takaichi is prioritizing faster economic growth. Only two of the three BOJ appointees supported Friday's hike, indicating potential challenges ahead as Takaichi prepares to replace the most hawkish members of the current board.
The global bond markets are currently turbulent, with inflation and borrowing costs on the rise worldwide. Balancing the desires of both Ueda and Bessent will prove increasingly difficult. It remains unclear what interest rate level would appease Bessent, whose main concern is safeguarding U.S. Treasuries from any shocks in Japan. Meanwhile, domestic economic growth has been sluggish despite inflation exceeding targets.
Written by urgent.news from Japan Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
