U.S. Treasury Secretary Scott Bessent said on the 31st (local time) that he believes the Japanese government and the Bank of Japan (BOJ) will take steps that will lead to a stronger yen.
Minister Bessent, in an interview with U.S. business network CNBC that day, was asked about the effect of joint intervention by the U.S. and Japanese governments in the foreign exchange market and said, "I cannot interfere with the natural balance," adding, "All we can do is send signals, and I have information the market does not have."
He went on, "I believe the Japanese government and the Bank of Japan will take steps that will lead to a stronger yen." When asked, "Does this mean a BOJ rate hike?" he answered, "Market participants have already priced in a rate increase."
Minister Bessent's remarks are seen as suggesting that as the yen weakens again, the Bank of Japan will respond to the yen's slide with a rate increase next month.
Earlier, the U.S. and Japanese governments jointly intervened in the foreign exchange market on the 31st of last month by purchasing yen. At the time, the yen's value fell to around 164 per dollar, the lowest in 40 years. The yen later rebounded at one point but turned weaker again, dropping to 160.20 per dollar on the New York foreign exchange market on the 28th.
Reuters, citing sources, reported that the Bank of Japan plans to raise interest rates at the monetary policy meeting scheduled for Sept. 17–18, and that it is also considering accelerating the pace of hikes beyond the current roughly twice a year.
Minister Bessent is expected to attend the Group of 20 (G20) finance ministers' meeting that opened that day in Asheville, South Carolina, and to meet with Japan Finance Minister Katayama Satsuki and Bank of Japan Governor Kazuo Ueda during the gathering.