The U.S. Treasury secretary expressed expectations for a Bank of Japan rate hike and stressed that Japan should take decisive measures to correct yen weakness. The meeting was held at a G20-related venue, and discussions on normalizing the BOJ's monetary policy reportedly made progress.
The U.S. Treasury Department released details on 1 August of a meeting between Treasury Secretary Bessent and Bank of Japan Governor Ueda Kazuo (植田和男). Bessent said he strongly supported Japan taking decisive market and monetary policy measures to correct yen weakness, and expressed expectations for a BOJ rate hike.
The meeting was held on 30 August in Asheville, North Carolina, and Governor Ueda said they discussed the normalization of the BOJ's monetary policy. Bessent stressed that appropriately formulating and communicating monetary policy was key to avoiding excessive exchange-rate volatility.
In the Tokyo market, the long-term interest rate exceeded 3% for the first time in 30 years, while the yen traded in the ¥160 range to the dollar. Bessent voiced concern that yen weakness and declines in Japanese government bonds could spill over into U.S. long-term interest rates, and said Japan was taking the right measures.
At a press conference after the G20 concluded, Ueda described the meeting as useful but declined to comment on its specific content. He said he wanted to hold thorough discussions on the conduct of monetary policy, including further rate hikes, at the next meeting and beyond.