Bessent BoJ rate hike speculation grew after U.S. Treasury Secretary Scott Bessent said policy must back last week’s joint yen intervention.
In a CNBC interview, Bessent said intervention alone would not be enough to steady the yen. He said, “it will require policy to follow up on the intervention.” However, he did not say what the Bank of Japan should do. Instead, he said, “I won’t pre-judge what the BoJ should do.”
Bessent also said Japan was making “serious efforts” to curb currency weakness. Additionally, he said the United States would not have joined the operation without confidence in Tokyo’s wider policy approach. He said, “US would not have joined if it was not optimistic about Japan policies.”
Bessent BoJ Rate Hike Signals
Those remarks added to market talk that Japan may be moving toward more policy action. The source article said Washington and Tokyo showed an unusually strong level of coordination after last week’s joint currency intervention. Moreover, Bessent argued that a weak yen had created economic distortions. He also said Japan’s inflation problem was largely tied to currency depreciation.
The article said his comments may signal that foreign exchange intervention on its own will not stabilize the yen. Therefore, traders may read the interview as support for further steps from Japan. Still, the source noted that the exact form of any next move remains unclear.
Joint Intervention Adds to Yen Focus
Earlier in the session, the source said Justin had posted that MUFG saw the joint intervention as a possible turning point for the yen. According to the article, the bank said the United States may have agreed to an arrangement with Japan tied to continued Bank of Japan policy normalization. The article also cited Mimura’s comment, “I have a shared understanding with the BOJ,” after the coordinated move.
The source added that intervention acts as a short-term fix. It said the yen would likely need either a dovish repricing in Fed rate expectations or faster BoJ tightening to reverse the trend.
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Source: InvestingLive
