Bessent Backs Ueda as Yen Intervention Signals Policy Shift

Bessent attributed Japan’s recent inflationary pressure to a combination of energy costs and an excessively weak yen. He expressed optimism that as these pressures abate, the Japanese economy will enter a more stable cycle. These remarks are particularly significant given Bessent’s history of advocating for higher Japanese interest rates to curb the currency’s slide, which recently hit 40-year lows.

The Treasury Secretary emphasized that the recent, rare joint intervention to purchase yen was designed to prevent volatility from cascading across Asia. He noted that the yen’s weakness has forced other regional currencies, including the Korean won, to depreciate, while simultaneously complicating China’s currency policy. Having known Ueda for 15 years, Bessent described the Governor as market-savvy, further fueling speculation that a rate increase is imminent when officials meet next month.