TOKYO (Reuters) -The Japanese government’s willingness to allow the central bank policy space will be key to anchoring inflation expectations and avoiding excess exchange rate volatility, U.S. Treasury Secretary Scott Bessent said in an X post on Wednesday.
“I am encouraged by her deep understanding of how Abenomics has moved from a purely reflationary policy to a program that must balance growth and inflationary concerns for the citizens of Japan,” Bessent wrote on his meeting with Japanese Finance Minister Satsuki Katayama on Monday.
The dollar fell 0.3% to 151.59 yen after the comments, which revived market expectations of a near-term interest rate hike by the Bank of Japan.
The comments come ahead of the BOJ’s two-day policy meeting ending on Thursday, when markets widely expect the central bank to hold off on raising interest rates.
(Reporting by Leika Kihara; Editing by Christopher Cushing and Muralikumar Anantharaman)
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