Key Summary

The yen strengthened on Bessent's comments, reinforcing what markets were already treating as a near fully priced September BOJ hike, and his remarks add to the case that policy divergence between the Fed and BOJ could narrow from the Japanese side rather than only through Fed easing. With USDJPY sitting close to 160, a level that has previously drawn joint US-Japan intervention, Bessent's language leans on rhetorical support for the currency rather than signalling fresh intervention appetite, since he explicitly said he does not view recent yen moves as disorderly. That distinction matters for FX desks, verbal support without an intervention threat tends to have a shorter half-life than coordinated action, so the durability of any yen bid will likely depend on the BOJ actually delivering in September rather than on today's comments alone. A hike delivered in September rather than October could also feed speculation the BOJ shifts to a quarterly hiking cadence, which would be a more structurally yen supportive shift than a single, isolated move. -- Earlier: Bessent says yen slide is contained, backs Ueda ahead of G20 talks -- Bessent says Japan will act to prop up the yen, and the market is now almost fully pricing a BOJ hike in September to make that happen. Summary: Treasury Secretary Scott Bessent told CNBC he believes Japan's government and the BOJ will take action leading to a stronger yen, remarks made at the G20 finance leaders' meeting in Asheville, North Carolina. Bessent said he has information the market doesn't have, and when asked if that meant a rate hike, said "I think the market's pricing that in now." The comments followed similar remarks to Reuters on Sunday, where Bessent said he expected BOJ Governor Kazuo Ueda to "do the right thing" on policy to combat yen declines. The yen gained against the dollar following the comments; USDJPY stood at 159.75 on Monday, close to the 160 level seen as raising the chance of yen-buying intervention. A senior US Treasury official told NHK that Bessent met Ueda on Sunday and Japan's Finance Minister Satsuki Katayama on Monday, pressing for further rate hikes and clearer fiscal sustainability plans from Japan; Reuters could not independently confirm the meetings took place. Sources have told Reuters the BOJ is set to hike as soon as its September 17-18 meeting and may consider a more aggressive pace than its recent roughly twice yearly cadence; Japan and the US carried out a rare joint yen-buying intervention on July 31 that failed to put a sustained floor under the currency. CNBC reported on Monday. "I have information that the market doesn't have, and it's my belief that the Japanese government and the BOJ will do the things that will lead to a stronger yen," Bessent said in the interview, conducted during a Group of 20 finance leaders' gathering in Asheville, North Carolina. Asked directly whether that meant raising interest rates, Bessent replied, "I think the market's pricing that in now." The remarks followed comments Bessent made to Reuters on Sunday, in which he said he expected BOJ Governor Kazuo Ueda to "do the right thing" on monetary policy to combat the yen's decline. The yen strengthened against the dollar following Bessent's comments, reinforcing dominant market expectations that the BOJ will raise rates at its next policy meeting. The dollar was last at 159.75 yen, still close to the 160 level that has previously been seen as increasing the likelihood of yen buying intervention from Japanese authorities. A senior US Treasury Department official told Japanese public broadcaster NHK that Bessent met with Ueda on Sunday and with Japan's Finance Minister Satsuki Katayama on Monday, with Erin Browne, undersecretary for international affairs at Treasury, quoted as saying Bessent called for further rate hikes and for Japan to more clearly demonstrate how it plans to achieve fiscal sustainability. Reuters said it could not independently confirm the meetings took place. Sources have previously told Reuters that the BOJ is positioned to raise rates as soon as its September 17 to 18 meeting, and is weighing a more aggressive hiking pace than its recent practice of roughly two increases a year. Bessent's repeated public calls for BOJ tightening have been cited as one of the factors pushing markets to nearly fully price in a September hike. The BOJ last raised rates in June, and analysts have said a hike delivered in September, rather than being pushed to October, could fuel expectations the central bank shifts to a quarterly hiking cadence going forward. A persistently weak yen has driven up Japanese import costs and broader inflation, a dynamic partly attributed to the BOJ's comparatively slow pace of tightening, which has kept the interest rate gap with the US wide. Japan and the US carried out a rare joint yen buying intervention on July 31 in an effort to prevent a selloff in the yen and Japanese government bonds from spilling into global markets, though that action failed to put a sustained floor under the currency. Bessent told Reuters he did not view the yen's recent moves as disorderly, a comment that suggests Washington currently has little appetite to join Tokyo in another round of direct market intervention, leaving the BOJ's own policy decision as the more likely lever for any further yen support. Bank of Japan Governor Ueda This article was written by Eamonn Sheridan at investinglive.com.