U.S., Japan back yen stability
Bessent backs Bank of Japan amid market volatility
U.S. Treasury Secretary Scott Bessent expressed strong confidence in Bank of Japan Governor Kazuo Ueda’s stewardship of monetary policy after meetings with Japanese leaders in Tokyo, while underscoring sustained U.S.–Japan coordination to counter excessive currency volatility.
Bessent told reporters he believed Japan’s economic fundamentals were robust and that those strengths would be reflected in the exchange rate, comments coming after a sudden yen move that brokers described as a rate check. He and Prime Minister Sanae Takaichi agreed that excessive volatility is undesirable and pledged ongoing coordination between the two governments to combat disruptive currency swings. Japanese Finance Minister Satsuki Katayama said discussions reaffirmed joint efforts under a prior U.S.–Japan statement permitting foreign‑exchange intervention to address extreme market moves.
The meetings followed heightened market focus on Japan’s gradual shift away from ultra‑loose monetary settings under Governor Ueda, who has overseen cautious normalization including adjustments to yield‑curve control and moves away from negative rates. Analysts say a credible, orderly transition by the Bank of Japan(BOJ) could influence global bond yields, capital flows and FX markets. Some BOJ policymakers have signalled earlier rate hikes amid rising inflationary pressures linked to higher oil prices, and markets have speculated on whether faster tightening might support the yen.
Bessent also met Japan’s economy minister Ryosei Akazawa and foreign minister Toshimitsu Motegi, discussing deeper cooperation on energy and critical minerals. His remarks on currency stability drew a mixed market reaction: the dollar briefly rose then fell against the yen, and it remained unclear whether recent moves reflected intervention. Japanese officials declined to say whether the talks touched directly on BOJ policy; Ueda’s schedule and recent international meetings left it uncertain whether he met Bessent during the latter’s visit.
