Japan's Finance Minister Katsunobu Kato stated that she and US Treasury Secretary Scott Bessent agreed that their recent coordinated currency intervention had a positive impact, while downplaying reports that Bessent had been pushing for a rate hike from the Bank of Japan. Speaking to reporters in North Carolina on local time Monday, Kato said, "Secretary Bessent and I confirmed that an orderly movement of the yen is vital for maintaining stability in global financial markets, including the US market, and that continued coordinated action between Japan and the US will help achieve this shared goal." She was attending the G20 finance ministers' meeting in the region.
Despite the rare joint currency intervention by Japan and the US in July, the yen has come under renewed downward pressure. Following a hawkish speech by Federal Reserve Chair Kevin Warsh last week, the yen fell to a one-month low, reaching its weakest level since the coordinated intervention. The yen's weakness, combined with a series of recent remarks from Bessent signaling the need for a Japanese rate increase, has fueled market speculation that the BOJ could hike rates at its September meeting.
However, Kato said she did not discuss monetary policy with Bessent, contrary to reports in local Japanese media. Earlier on the same day, NHK cited US Treasury Deputy Assistant Secretary for International Affairs Erin Browne as saying that Bessent had told both Kato and BOJ Governor Kazuo Ueda in separate meetings that Japan's next step should be a rate increase.
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