Overview
- Treasury Secretary Scott Bessent, speaking at the G20 finance meeting in Asheville on Monday, said he believes Japan’s government and the Bank of Japan will act to strengthen the yen.
- Swap traders have pushed the probability of a BOJ rate hike in September to roughly 88 percent after Bessent’s remarks, raising market expectations of faster monetary tightening from Tokyo.
- The yen firmed toward the 160 per dollar level that historically increases the chance of yen‑buying intervention, and markets recalled the July 31 joint U.S.-Japan intervention that failed to hold a sustained floor.
- Bessent told Reuters he did not view recent yen moves as disorderly, a stance that signals limited U.S. appetite right now for another coordinated market intervention and puts the emphasis on BOJ policy action.
- Japan’s shift from decades of ultra‑easy policy matters to global markets because a disorderly yen can force Japanese sales of foreign assets, including U.S. Treasuries, which would push U.S. borrowing costs higher and affect households and businesses.