U.S. Treasury Secretary Scott Bessent stated on the 31st local time regarding the renewed weakness of the Japanese yen, "I believe the Japanese government and the Bank of Japan will do something that will lead to a stronger yen."

When asked about the effectiveness of the U.S. intervening in the dollar-yen exchange market alongside the Japanese government during an interview with the U.S. economic media outlet CNBC, Bessent responded, "I cannot influence the natural balance. All we can do is send signals, and I have information that the market does not."

In response to a follow-up question asking if this implied a rate hike by the Japanese central bank, Bessent answered, "Market participants have already priced it in."

Bessent's remarks are interpreted as suggesting that amidst the renewed weakness of the yen, the Bank of Japan will respond with a rate hike next month.

Following Bessent's comments, Reuters noted, "The yen strengthened against the dollar, reinforcing the market's prevailing expectation that the Bank of Japan will raise interest rates at its September policy meeting."

Reuters also cited sources reporting that the Bank of Japan plans to raise interest rates at its meeting on September 17–18, and is considering further accelerating its pace of rate hikes—currently about twice a year—more aggressively.

Secretary Bessent is attending the G20 Finance Ministers Meeting, which kicked off on this day in Asheville, South Carolina, U.S.

During this meeting, he is expected to meet with Japanese Finance Minister Satsuki Katayama and Bank of Japan Governor Kazuo Ueda, drawing attention to what additional messages they might deliver regarding the yen's instability.

Previously, the U.S. and Japanese governments jointly intervened on July 31 by purchasing yen.

At that time, the yen had dropped to around 164 yen per dollar, marking its lowest level in 40 years.

Despite this intervention, the yen turned weak again, briefly surpassing the psychological resistance level of 160 yen to reach 160.20 yen in the New York foreign exchange market on the 28th of last month.

(Photo: AP, Yonhap News)