Key insights
- U.S. Treasury Secretary Bessent expressed confidence in BOJ Governor Ueda's ability to manage monetary policy effectively, contingent on the Japanese government granting the BOJ greater independence in setting interest rates. This suggests potential for further rate hikes in Japan, which could impact the Yen and, to a lesser extent, global currency markets and US equities.
By David Lawder
PARIS, May 19 (Reuters) - U.S. Treasury Secretary Scott Bessent said on Tuesday he is confident Bank of Japan Governor Kazuo Ueda will do "what he needs to do" if granted sufficient independence by Japan’s government, signalling Washington’s desire for further rate hikes by the central bank.
"I think he’s an excellent central banker, and if they will give him the room to do what he will do, needs to do, I am confident that they will have great monetary policy," Bessent told Reuters in an exclusive interview.
The remarks reaffirm Bessent’s long-standing confidence in Ueda while signalling that the success of Japan’s monetary strategy will hinge in part on Prime Minister Sanae Takaichi’s administration allowing the central bank freedom over interest rate decisions.