Bessent says he is sure BOJ chief Ueda will 'do what is best', NHK reports

U.S. Treasury Secretary Scott Bessent expressed optimism that Bank of Japan Governor Kazuo Ueda will implement policies to slow Japan's inflation, potentially leading to a rate hike.

U.S. ​Treasury Secretary Scott Bessent said ‌he was ​sure Bank of Japan Governor Kazuo Ueda will "do what is best" for ‌the country's economy, public broadcaster NHK reported on Wednesday. "I do believe that part of the inflation uptick in Japan was a result of ‌the weak yen and also the energy prices," Bessent told ‌NHK in an interview.

As energy prices come down and excessive yen weakness is fixed, Japan's inflation will slow, allowing Japan and the yen to "go into ⁠a virtuous ​cycle," he ⁠said. The remarks, which follow a series of comments from Bessent in the past ⁠calling for higher Japanese rates, heighten the chance of an interest rate ​hike by the BOJ at its next policy meeting on ⁠September 17 and 18.

Bessent had said he would meet Ueda at a ⁠U.S.-hosted ​G20 finance leaders' meeting at the end of August, which would precede the BOJ's September policy meeting. Japan and the United ⁠States launched a rare joint yen-buying intervention last week and vowed to ⁠take ⁠further action if needed to shore up the currency, showing their resolve to arrest the yen's slide to ‌40-year ‌lows.