U.S. Treasury Secretary Scott Bessent expressed strong support for Japan’s decisive market and monetary policy actions to address the yen’s substantial undervaluation after meeting Bank of Japan Governor Kazuo Ueda on August 30 on the sidelines of the G20 finance ministers and central bank governors gathering in Asheville, North Carolina. The Treasury Department said Bessent stressed setting monetary policy appropriately and communicating with markets to anchor inflation expectations and avoid excessive foreign-exchange volatility, while noting that yen weakness was contributing to inflation pressure in Japan. Markets took the remarks as backing for another BOJ interest-rate increase, with overnight index swap pricing implying about a 99% probability of a hike at the September 18 meeting as of September 1, more than double the level a month earlier. In a CNBC interview on August 31, Bessent said he was confident the Japanese government and the BOJ would take steps leading to a stronger yen, following the rare U.S.-Japan joint intervention on July 31. Because Tokyo has prioritized low borrowing costs, that stance could diverge from Prime Minister Sanae Takaichi’s policy approach. Japan’s 10-year government bond yield had reached 3%, its highest since September 1996, after 15.4 trillion yen in yen-support spending, amid a global bond sell-off Bessent linked mainly to reaccelerating U.S. growth rather than a dire situation.