U.S. Treasury Secretary Scott Bessent urged Bank of Japan Governor Kazuo Ueda to conduct sound monetary policy to anchor inflation expectations and avoid excessive yen volatility during a G20 meeting in Asheville, North Carolina, according to the U.S. Treasury Department. The high-level discussions, held on September 1, 2026, cement the case for an impending Japanese interest rate hike.
Bessent and Ueda G20 Meeting Focuses on Yen Volatility
According to the Treasury Department, Secretary Bessent met with Governor Ueda on Sunday at the G20 finance ministers and central bank governors meeting. Bessent emphasized the need for proper monetary policy design and clear messaging to steady inflation expectations and prevent excessive fluctuations in exchange rates. The U.S. Treasury stated that Bessent also expressed strong support for Japan’s decisive market and monetary steps to address the substantial undervaluation of the yen.
The talks highlighted how the weak currency continues to drive up import prices and broader inflation inside Japan, creating financial pressure for households. Japanese Finance Minister Satsuki Katayama also attended the two-day gathering of G20 finance leaders.
Pressure Mounts for a September Bank of Japan Rate Hike
According to Reuters reporting by David Lawder and Daphne Psaledakis, Bessent’s remarks effectively lock the Bank of Japan into raising borrowing costs at its upcoming meeting on September 17-18. While market participants already anticipated a rate increase due to mounting inflation pressures, Bessent stated to Reuters that recent yen moves were not disorderly. Instead, he called for rate hikes and noted he expects Ueda to do the right thing to combat yen declines.
Did you know? The U.S. joined Japan in a rare joint yen-buying intervention on July 31 to defend the sagging currency from spilling over into global markets, though the move failed to put a sustained floor under the exchange rate.
A recent slew of hawkish central bank communication has pushed markets to nearly fully price in a September rate hike. This follows an earlier policy rate increase to a 31-year high of 1% in June.
Frequently Asked Questions
Why did U.S. Treasury Secretary Scott Bessent meet with Bank of Japan Governor Kazuo Ueda?
According to the U.S.
When is the next Bank of Japan policy meeting?
According to Reuters, the Bank of Japan’s next policy meeting is scheduled for September 17-18, where markets have nearly fully priced in an anticipated interest rate hike.
How has the weak yen impacted Japan’s economy?
According to Treasury and Reuters reports, a weak yen has pushed up import prices and broader domestic inflation, increasing the cost of living for Japanese households.
Want to stay updated on global monetary policy shifts and central bank decisions? Subscribe to our daily newsletter for breaking financial news and expert analysis.
Keep reading