Bessent urges Japan fiscal reform for yen stability ahead of July intervention
· World · Economic Times, Reuters
US Treasury Secretary Scott Bessent pressed Japanese Finance Minister Satsuki Katayama to rein in fiscal spending and raise interest rates during a June 22 call, warning that bond sell-offs could spill over to US debt. Katayama sought Washington's help to support the weakening yen, citing concerns over inflation hurting Prime Minister Sanae Takaichi. Bessent linked policy consistency to Bank of Japan's inflation fight, urging Tokyo to address fundamental factors driving the yen's decline. The dialogue helped set the stage for massive joint US-Tokyo intervention in late July to stabilise the currency.
Why it matters
Japanese voters face higher costs from yen-weakened inflation, while US markets risk contagion from Japanese bond volatility spilling into Treasury markets.
Read the original report — Economic Times
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