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Bessent urges Japan to do more after US currency intervention
After the end of July and early August intervention, Bessent pressed Japan on monetary and fiscal policy, while markets price about a 74.0% chance of a BOJ rate hike in September.
U.S. Treasury Secretary Scott Bessent met Bank of Japan Governor Kazuo Ueda and Japan Finance Minister Shunichi Suzuki on the sidelines of the G20 finance meetings in North Carolina, urging Japan to take further steps after the United States agreed to help intervene in currency markets in late July and early August, according to Forexlive.
Forexlive reports that Bessent said he hopes Ueda and the BOJ will “do the right thing” on monetary policy, and he also suggested Japan’s government should step back on fiscal policy now that deflation is no longer an issue, a message aimed at the current administration’s expansionary stance.
On the BOJ outlook, Forexlive noted that traders see roughly a 74.0% chance of a rate increase at the September meeting, with pricing that implies an aggressive tone, around 80 basis points by June of next year.
Forexlive also said Japan’s ministries and agencies have made an initial budget request on record totaling about 143 trillion yen, and it framed the political pressure on Japan’s leadership as unlikely to lead to a quick shift.