Bessent downplays yen weakness, defers to Bank of Japan on rates

Treasury Secretary Scott Bessent downplayed the yen’s recent weakness as “pretty well contained,” signaling that the disorderly moves that once triggered a rare U.S.-Japan intervention are unlikely to recur. He reiterated support for Bank of Japan Governor Kazuo Ueda to chart monetary policy, with Prime Minister Sanae Takaichi’s backing, and he plans to meet Ueda on the sidelines of the G20 to discuss policy pace and the end of Abenomics’s reflation era. Bessent stressed that Tokyo should set its own pace on rate moves, declining to advise on consecutive hikes and suggesting Japan has likely reached the end of Abenomics as the U.S. offers cautious approval of Tokyo’s gradual normalization. He also signaled robust talks with China on trade, including reducing imbalances and potential tariff adjustments, while emphasizing responsible governance over intervention. These comments come as markets await new data and rhetoric from the G20, with USD/JPY hovering around 160 and attention on whether the BOJ’s policy stance will diverge from U.S. pressure. Overall, Washington appears to favor letting Ueda steer policy, reducing near-term intervention risk and focusing on broader global economic rebalancing.