US Treasury Secretary Scott Bessent declined to directly advise the Bank of Japan on raising interest rates during an NHK interview in early August, citing respect for the central bank’s independence and confidence in Governor Kazuo Ueda. The BoJ has raised its policy rate to 0.75% in December 2025 and subsequently to 1%, a historically significant level for Japan after decades of negative or near-zero rates. Markets are speculating about further hikes in September or October 2026, following a coordinated US-Japan currency intervention around July 31 to August 1, 2026. Japanese Prime Minister Sanae Takaichi has historically favored looser monetary policy, putting her at odds with Bessent’s hawkish preferences.
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