Scott Bessent signals Japanese intervention to support the yen as 10-year yields reach 30-year high

U.S. Treasury Secretary Scott Bessent signaled that the Japanese government and the Bank of Japan will take action to support the falling yen. During a Monday interview, Scott Bessent stated that he has information the market does not have and believes Tokyo will take steps to lead to a stronger yen. In separate meetings with Japanese Finance Minister Satsuki Katayama and Bank of Japan Governor Kazuo Ueda, Scott Bessent emphasized the need for Japan to communicate its path toward fiscal sustainability and rate hikes. Satsuki Katayama told reporters that the U.S. and Japan have agreed to continue coordinated efforts to achieve orderly moves in the yen to ensure global market stability. Japan's 10-year yield rose 6 basis points on Tuesday to nudge above 3% for the first time since 1996. This rise reflects a higher chance of a Bank of Japan rate hike in September. The yen was last trading at 160.1 per dollar, breaching the 160 level. A weaker currency raises import costs and adds pressure on consumer prices in Japan.

Sources

• Reuters
  Global bond rout deepens as Japan yield hits key milestone
• CNBC
  Japanese borrowing costs hit 30-year high as Bessent says Tokyo may intervene to boost yen
• Nikkei Asia
  Japan stocks hindered by higher cost of capital as interest rates rise

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Paywall and unreadable sources

• Bloomberg.com
  Japan’s 10-Year Bond Yield Hits 3% for First Time Since 1996
• WSJ
  Japan’s Ten-Year Bond Yield Hits 3.00% for First Time in Three Decades