US Treasury Secretary Scott Bessent said in a CNBC interview that the Japanese government and the Bank of Japan would take measures that would lead to a stronger yen, which was interpreted as a hint that the Bank of Japan would raise interest rates. He also indicated that, although Japan and the United States conducted yen-buying intervention at the end of July, the market had already priced it in.
US Treasury Secretary Scott Bessent said at the G20 Finance Ministers and Central Bank Governors Meeting, which opened in North Carolina, that the Japanese government and the Bank of Japan would take measures that would lead to a stronger yen, while making remarks interpreted as hinting at a Bank of Japan rate hike. He is chairing the meeting.
Although Japan and the United States conducted coordinated yen-buying intervention at the end of July, the yen weakened and the dollar strengthened in the New York market at the end of last week against expectations of a Fed rate hike, with the exchange rate reaching the ¥160-per-dollar range. Regarding the effects of intervention, Bessent said, “It cannot affect the natural equilibrium level. All we can do is send a signal.”
Regarding the Fed’s rate policy, he said, “I will not speculate on what it will do,” and expressed the view that the Fed would not raise rates unless secondary and tertiary effects of a supply shock were observed.
At the meeting, Bessent made clear that he would strongly urge member countries to cooperate on sanctions against Iran. At the same time, he referred to opposition from China, whose cooperation is widely seen as indispensable and which is expected to resist because of whether it has trade relations with Iran. He also commented on Canada’s treatment as a participating country and criticized Canada’s response.