U.S. Treasury Secretary Bessent has stepped up remarks supporting a Bank of Japan rate hike and urging Japan to strengthen its fiscal position, making his calls appear to go beyond the framework of U.S.-Japan cooperation. In September, provocative remarks directed at market participants were also reported.
Remarks concerning a Bank of Japan rate hike initially emphasized U.S.-Japan coordination immediately after the coordinated intervention to buy yen at the end of July, but have taken on an increasingly exhortatory tone since then.
Since late August, Secretary Bessent has expressed the view that Japan should enjoy the benefits of Abenomics and said that the Japanese government and the Bank of Japan should not take action that would lead to a stronger yen. He has also called for a roadmap to fiscal consolidation in Japan to be presented.
At a Texas event on 8 September, he went so far as to make remarks bordering on provocation toward market participants, once again underscoring U.S. concerns over stability in the dollar-yen exchange rate and long-term interest rates.