US Treasury Secretary Scott Bessent publicly called on Japan to raise interest rates to strengthen its weakening yen, during meetings held August 30-31 at the G20 finance leaders summit in Asheville, North Carolina [1, 2, 3, 4, 5]. Bessent met Japanese Finance Minister Satsuki Katayama and Bank of Japan Governor Kazuo Ueda, pressing them to take action that would boost the currency [1, 2, 3, 4, 5, 6]. He said, "I have information that the market doesn’t have, and it’s my belief that the Japanese government and the BOJ will do the things that will lead to a stronger yen" [1].
The yen hit historic lows around 1 USD = 163.99 JPY in July 2026, prompting a rare US-Japan joint intervention in currency markets on July 31 to support the currency [3, 4, 7, 6]. Bessent urged Japan to show a clear fiscal sustainability plan and reduce reliance on reflationary policies that he said have contributed to rising long-term Japanese bond yields, which risk affecting US interest rates [4, 8].
While some sources report Bessent directly pressured Japan’s officials to raise rates during the G20 meetings [3, 4], Finance Minister Katayama stated after their meeting that they "confirmed coordinated action between Japan and the US to maintain an orderly yen market, but there was no discussion on raising interest rates" [6]. On the other hand, BOJ Governor Ueda indicated in early September that the bank has come to believe it needs "to pay greater attention than before to upside risks" from inflation and is considering a rate hike [9, 7, 10].
The Bank of Japan is widely expected to raise rates at its next policy meeting on September 17-18, with market-implied odds around 94% [1, 3, 4, 5, 9, 7, 10]. Treasury officials confirmed Bessent's strong support for decisive action by the BOJ to anchor inflation expectations and strengthen the yen [5, 10].
Beyond Japan, Bessent called for G20 members to review trade relations with China to reduce global imbalances and promote China’s economic restructuring away from export dependence. He expects a late-September meeting between former President Trump and Chinese President Xi Jinping covering tariff reductions and AI regulation [11, 12].
The Bank of Japan’s policy meeting set for September 17-18 will be the key event to watch for concrete steps on rates and monetary policy toward the yen.
