Former Bank of Japan officials warned US Treasury Secretary Bessent’s “unusual”
intervention in Japanese monetary affairs could undermine BOJ credibility and
amplify global market volatility. Markets are pricing a 25bp BOJ rate hike at
next week’s meeting, an acceleration versus earlier expectations. Bessent has
intensified verbal pressure in recent weeks, provoking traders to bet against
him and claiming insider knowledge of the BOJ’s intentions. Finance Minister
Satsuki Katayama said the US treasury’s “I’m the house” warning to bond traders
sounds “a bit scary” in Japanese. Takahide Kiuchi, executive economist at Nomura
Research Institute and a former senior BOJ official, called the intervention
unusual and potentially damaging to BOJ independence; another ex-official warned
that perceived external influence on rate-setting would make markets more
skeptical of future BOJ guidance.
