US Treasury Secretary Scott Bessent has publicly urged Japan to raise interest rates, breaking with decades of American diplomatic norms around central bank independence. Swap traders now price in roughly an 88% probability that the Bank of Japan will hike rates at its next policy meeting on September 17-18, 2026. The BOJ already lifted its policy rate to 1% in June 2026, its highest level since 1995. Tokyo spent $96.4 billion in July 2026 defending the yen, and Bessent’s push is designed to allow organic yen strength to reduce the need for such costly interventions. This policy shift effectively signals the end of Abenomics, the ultra-loose monetary experiment launched in 2013 under Prime Minister Shinzo Abe.
Source: Read the original article
