Bessent Stresses Importance of BOJ Policy Space

Washington, Oct. 28 (Jiji Press)–U.S. Treasury Secretary Scott Bessent acknowledged Tuesday that giving the Bank of Japan policy space is key to stabilizing inflation expectations and exchange rates. The Japanese government’s “willingness to allow the Bank of Japan policy space will be key to anchoring inflation expectations and avoiding excess exchange rate volatility,” Bessent said in a social media post. The Japanese central bank is widely expected to hold interest rates steady at a policy meeting this week. Bessent’s post appears to be a call for the Japanese government to give the BOJ scope to raise interest rates, warning that leaving rates low will keep the yen weaker against the dollar. Referring to Japanese Finance Minister Satsuki Katayama, he said, “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.” Abenomics is the late former Japanese Prime Minister Shinzo Abe’s economic policy featuring monetary easing and fiscal stimulus. Takaichi is expected to succeed this policy. In his meeting with Katayama in Tokyo on Monday, Bessent said that sound monetary policy in Japan plays an important role in preventing excess exchange rate volatility, according to the U.S. Treasury Department. “Conditions are substantially different 12 years after the introduction of Abenomics,” Bessent also said in the meeting, warning against a return to Abenomics. END [Copyright The Jiji Press, Ltd.]