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Scott Bessent calls for Japanese interest rate hikes and a stronger yen during G20 meeting

U.S. Treasury Secretary Scott Bessent met with Bank of Japan Governor Kazuo Ueda during the G20 finance ministers' and central bank governors' meeting in Asheville, North Carolina. During the meeting, Scott Bessent emphasized the importance of sound monetary policy to anchor inflation expectations and avoid excessive exchange rate volatility.

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Scott Bessent expressed strong support for Japan's decisive market and monetary steps to address the substantial undervaluation of the yen. He noted that the yen's weakness contributed to domestic inflationary pressures in Japan. Scott Bessent also communicated to Japanese officials that Japan must clearly show markets a path toward higher interest rates and reduced debt, signaling that the era of massive stimulus was over. The administration announced that Scott Bessent's remarks reinforce the case for Kazuo Ueda to argue for a rate hike at the bank's policy meeting on September 17-18. Markets are currently pricing in a high probability of a rate hike. Scott Bessent noted that disorderly yen volatility could raise borrowing costs for American households and businesses, framing the issue as a domestic concern.

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