U.S. Backs Japan in Stabilizing Yen, Expects BOJ Steps: Bessent

Washington, Aug. 4 (Jiji Press)--U.S. Treasury Secretary Scott Bessent said Tuesday that Washington will help Japan stabilize the yen, and that he believes the Bank of Japan will take necessary measures, including a possible interest rate hike.

"I'm not going to prejudge what the BOJ should do, (but) I've known (BOJ) Governor (Kazuo) Ueda for 15 years, and I believe that he will do what is needed," Bessent said in an interview on U.S. broadcaster CNBC, after Japanese and U.S. authorities conducted their first concerted yen-buying foreign exchange market intervention in roughly 28 years on Friday.

The BOJ last conducted an interest rate hike in June, raising its target for the unsecured overnight call rate, Japan's benchmark short-term interbank lending rate, to around 1 pct from around 0.75 pct.

The treasury secretary said that he has an "extremely good working relationship" with his Japanese counterpart, Finance Minister Satsuki Katayama, and that Tokyo is "making serious efforts to stem the substantial undervaluation" of the yen.

"A stable yen is not only important for the U.S., but very important for the entire region," Bessent continued. He said that the Japanese currency's depreciation may have ramifications for other currencies, noting, "We've seen excess volatility in the (South) Korean won."

[Copyright The Jiji Press, Ltd.]