During his visit to Japan, U.S. Treasury Secretary Bessent voiced dissatisfaction with Japan's economic policies, and the Bank of Japan faced scrutiny over its independence. Policy Board member Takata (高田) expressed the view that the BOJ should proceed with flexible rate hikes to address the risk of rising prices.
The New York Times reported that when U.S. Treasury Secretary Bessent visited Japan in May this year, he had dinner with Finance Minister Katayama (片山) at an upscale restaurant in Tokyo, expressed the view that Japan's excessively weak yen was worsening inflation, and questioned the Bank of Japan's independence, among other matters. The report also said that Bessent stated that the situation would improve if the BOJ raised interest rates.
At the G20 in late August, he also expressed the view that the Japanese government and the BOJ should take measures that would lead to a stronger yen, and on 1 September said at a press conference that reflationary policy should be discontinued. In effect, he called for a review of the Takaichi administration's expansionary fiscal policy and BOJ rate hikes to correct yen weakness.
Meanwhile, although there is limited conflict between Japan's reflationists and the BOJ, the risks of reflationary policy in an inflationary environment are increasingly being recognized. In a speech on 1 September, BOJ Policy Board member Takata (高田) said that rate hikes should proceed flexibly, without being constrained by a fixed pace or increment.