US Treasury Secretary Scott Bessent stated on Sunday (August 30) that the recent yen movements have been "fairly controlled," dismissing any notion of disorderly conditions and suggesting Washington currently sees no need for a fresh round of joint intervention. Bessent declined to take a position on whether the Bank of Japan should pursue consecutive rate hikes, saying he would not "tell the central bank what to do," while expressing confidence in BOJ Governor Kazuo Ueda to "do the right thing."
Bessent: Yen Moves "Fairly Controlled," No New Intervention Needed
US Treasury Secretary Scott Bessent made clear in a media interview on Sunday that recent yen exchange rate fluctuations have been "fairly controlled" and are not in a state of disorder. This stance stands in sharp contrast to the official language used last month when the US and Japan carried out joint intervention. At that time, the yen had fallen to its lowest level since 1986, touching the roughly 163-164 range, prompting the two nations to jointly buy yen for the first time since 1998 in an effort to curb excessive volatility and prevent spillover into global markets. Japanese officials then emphasized the intervention targeted "excessive volatility," and Bessent had previously warned that disorderly yen moves could trigger forced position unwinding, which in turn would push up US borrowing costs. Although the yen has again slipped below the 160 level, fueling speculation of another intervention, Bessent believes the moves have moderated considerably and Washington does not currently see the need to repeat last month's action. His remarks send a clear signal: US tolerance for current exchange rate levels has increased, and the intervention threshold has not been lowered to an immediate-action level. This stance helps stabilize market expectations, reduces excessive betting on joint intervention in the near term, and shows the US and Japan prefer to observe fundamental shifts in exchange rate coordination rather than frequently resort to administrative measures. USD/JPY may now respond more to Japanese economic data and policy signals in the short term.
Trust in Ueda, No Stance on Consecutive Hikes
In the interview, Bessent declined to comment specifically on whether the Bank of Japan should pursue consecutive rate hikes to address yen weakness, stressing "I'm not going to tell them what to do," and explicitly expressing trust in BOJ Governor Kazuo Ueda to "do the right thing." He noted that Ueda, with the backing of Prime Minister Takaichi Sanae, is well-positioned to handle monetary policy appropriately. Bessent plans to meet with Ueda during the G20 Finance Ministers' meeting scheduled this week in Asheville, North Carolina, and spoke highly of him as an "underrated, astute market operator," noting their 15-year acquaintance and expressing confidence in his economic expertise and market sensitivity. Bessent had previously called on the BOJ multiple times to raise rates in response to inflation and yen weakness, with markets almost fully pricing in a September hike. His deliberate restraint this time, avoiding direct pressure, reflects respect for BOJ independence while signaling US satisfaction with the current policy path. The meeting coincides with the G20 gathering, where the two may exchange in-depth views on exchange rate stability, monetary policy normalization, and global economic coordination. Bessent's comments help ease market concerns about aggressive US pressure on Japanese monetary policy, shifting focus back to domestic Japanese data and inflation trends.
Abenomics at Its End, Japan Should Let Gains Continue
Bessent further pointed out that Japan may have reached the endpoint of Abenomics. This reflation program — centered on massive monetary stimulus, fiscal expansion, and structural reform — was launched by the late Prime Minister Shinzo Abe in 2013 to escape prolonged deflation. He stated that under the Sanae government, with reduced government intervention, Japan should allow the accumulated gains from Abenomics to work naturally and transition into a new phase of "Sanaenomics." Bessent believes Japan has successfully "conquered" deflation and can now enjoy the economic vitality boost generated by past policies. These remarks indicate Washington is content with Tokyo's gradual policy normalization, rather than eager to push for faster, stronger yen support measures. The US values Japan's sustainable growth through endogenous reforms and monetary policy adjustments, rather than reliance on external intervention. Bessent's assessment provides a policy tone for markets: USD/JPY will remain more sensitive in the short term to Japanese economic data releases, central bank communications, and official talks during the G20, rather than new US pressure or expectations of joint action. Overall, the US stance shifting from active intervention to observation and trust favors a gradual stabilization of the yen on fundamental drivers. Bessent's comments lower intervention expectations, returning the policy path to data-driven decision-making.
Bessent's Remarks Lower Intervention Expectations, Policy Path Returns to Data-Driven Approach
Bessent's statement that yen moves are "fairly controlled" reduces market expectations of another joint intervention in the near term. When the yen had previously broken below 160, markets speculated the US and Japan might act together again; Bessent's comments effectively confirm the 160 level is not an "automatic trigger line," easing intervention pressure on USD/JPY around that zone. By declining to comment on BOJ consecutive hikes and emphasizing "trust Ueda to do the right thing," the US is refraining from adding extra political pressure on Japan's central bank, allowing the BOJ's policy path to return to being data-driven — Tokyo inflation, services prices, and wage growth domestically will once again become core variables for yen direction. Bessent's assessment that Abenomics has reached its endpoint confirms the long-term direction of Japanese policy normalization, meaning the medium-term trajectory of USD/JPY will depend more on the natural evolution of the US-Japan interest rate differential. If the Bessent-Ueda meeting during the G20 releases coordinated signals, it could provide short-term support for the yen. Overall, USD/JPY is expected to consolidate in the 158-161 range in the near term, awaiting fresh data and policy signals to break the stalemate.
(USD/JPY daily chart, Source: Easy-Forex) As of 8:27 Beijing time, USD/JPY was trading at 160.04/05.