U.S. Treasury Secretary Scott Bessent said Sunday that recent yen movements were "pretty well contained," dismissing market concerns about disorderly depreciation after the Japanese currency slid below 160 per dollar on Friday—a level often cited as a potential intervention trigger.
Bessent's remarks push back against speculation about a joint U.S.-Japan yen-buying intervention. A rare coordinated intervention occurred July 31 to arrest yen weakness and prevent contagion into Japanese government bond markets.
In an interview, Bessent said he expects Bank of Japan Governor Kazuo Ueda to "do the right thing" on monetary policy, with backing from Prime Minister Sanae Takaichi. "I'm not going to tell them what to do," Bessent said, though he has previously urged rate increases to combat inflation and yen declines. Markets now price in a near-certain rate hike at the BOJ's September policy meeting.
Bessent signaled the end of "Abenomics," the reflationary program launched in 2013 by the late Prime Minister Shinzo Abe. Japan has "conquered" deflation and moved to "Takaichi-nomics," which emphasizes deregulation and shareholder returns with less government intervention. "I think they should just sit back and enjoy the success of Abenomics and let that run," Bessent said on fiscal policy.
Bessent plans to meet Ueda on the sidelines of the Group of 20 finance leaders' gathering in Asheville, North Carolina, beginning Monday. "I've known him for 15 years. He's a great economist," Bessent said.
