Scott Bessent Predicts Bank of Japan Interest Rate Hike

Scott Bessent stated in an interview with NHK that he expects Bank of Japan Governor Kazuo Ueda to take necessary actions to stabilize the Japanese economy. Bessent attributed recent upticks in inflation to high energy prices and a weak yen, suggesting that Japan can enter a virtuous cycle once these factors stabilize.

These remarks follow previous calls from Bessent for higher Japanese interest rates and increase the likelihood of a rate hike during the Bank of Japan's policy meeting scheduled for September 17 and 18. Bessent is set to meet with Ueda at a G20 finance leaders' meeting hosted by the United States in late August.

In a related effort to support the currency, the governments of Japan and the United States recently conducted a joint yen-buying intervention to stop the yen from sliding to 40-year lows. Both nations have pledged to take further action if necessary.