US Treasury Secretary Scott Bessent said Sunday that recent declines in the Japanese yen remain "well contained," effectively dismissing calls for joint currency intervention and signaling Washington's comfort with the Bank of Japan setting its own policy pace.
Bessent's comment, made in an interview, directly contradicts the language both governments deployed last month when the yen weakened to roughly 163.73 per dollar—its worst level against the greenback since 1986. That August episode triggered the first coordinated US-Japan currency intervention since 1998, with Japanese officials citing "excessive volatility" as the rationale.
By framing current yen weakness as orderly, Bessent has substantially lowered the probability of a repeat joint intervention in the near term. The assessment also reduces immediate pressure on the BOJ to pursue aggressive consecutive rate hikes as a currency-support measure.
Bessent explicitly deferred to Bank of Japan Governor Kazuo Ueda on monetary policy, saying he expects Ueda to "make the right calls" with backing from Prime Minister Sanae Takaichi. He declined to comment on whether the central bank should accelerate tightening.
Bessent described Ueda, whom he has known for 15 years, as a "highly capable and underrated market operator." The two are scheduled to meet Monday on the sidelines of the G20 finance leaders gathering in Asheville, North Carolina.
For fixed-income markets, Bessent's remarks ease pressure for rapid repricing of the Japanese yield curve. The reduced external push for aggressive tightening cuts immediate duration risk for Japanese government bonds.
Bessent also signaled US comfort with Tokyo's gradual policy normalization, suggesting Japan has "likely reached the end of Abenomics," the reflationary program associated with former Prime Minister Shinzo Abe. He praised the current administration's shift toward reduced government intervention in economic policy.
USD/JPY will now turn more sensitive to incoming Japanese economic data and rhetoric from the G20 gathering rather than new US pressure for intervention or rapid yen support.
