Why did Bessent talk about Japan again?

Yesterday, Finance Minister Bessent made a remark, especially noticeable part, that he made another remark about Japan, which was about August 14th, when he was speaking straightforwardly.

Now, of course, Japan’s bond rate has an effect on the U.S. bond rate, which is weaker than then. The U.S. bond rate is very stable, and even if you look at the bidding process for government bonds, the demand is solid. Let’s take a look at Bessent’s remarks

Regarding the weak yen, Besant said, “If the Bank of Japan manages its financial policy properly, the yen market will also stabilize at an appropriate level.” He declined to comment on the specific level, but added that the Bank of Japan’s monetary policy is key to adjusting the exchange rate.

“The yen began to strengthen at the beginning of this year and fell below 140 yen per dollar in April, but has since weakened again and has now risen to near 150 yen. Markets are paying attention to how the Bank of Japan will determine whether to raise interest rates at the upcoming financial policy-making meeting on Oct. 29-30.”

“Governor Kazuo Ueda is a very capable person,” Bessant said, drawing the line, “[Whether to raise interest rates] depends on the governor’s judgment, which is not something I would comment on.” – Nate News – “

Wow, we’re talking about Japan again, saying that monetary policy is the key to exchange rate control. Maybe we’re talking about things in the future, not now, but in the future. This seems to be something that we’re paying attention to again as the chances of winning the election for the LDP president, Takaichi.

Not long ago, there was news that President Takaichi’s election as Japanese prime minister was uncertain because the Komeito Party, which has led the coalition for 26 years, recently announced its departure, and the majority of the coalition foundation collapsed..

The reason for the departure of the New Komeito is because of President Takaichi. Originally, Abe’s tendencies in the New Komeito and the Liberal Democratic Party were not getting along well. In addition, there was a political fund scandal in the Liberal Democratic Party. This was centered on Abe’s forces in the Liberal Democratic Party..

When I asked Takaiichi, the center of Abe’s tendency, what he would do, he reviewed the coalition government with the National Democratic Party, but… the National Democratic Party and the Liberal Democratic Party have quite different political characteristics, so in the news.. News has emerged that Governor Takaichi will join hands with the Restoration Society.

The Yushin Society, like the Liberal Democrats, is a conservative political group, and it seems quite likely that the Komeito will join hands as it leaves…If we join hands with the Restoration Society, President Takaichi’s election as prime minister will be more likely. Here’s the problem.

The coalition between the existing Liberal Democratic Party and the New Komeito Party was slightly more left-leaning than the extreme conservatives. When you join hands with the Restoration Society, the same right side meets. Oh, it seems that Abe will be stronger than that. I wonder if Bessent pre-declared this in advance..

We also need to look at the comments made by the BOJ’s Commissioner Naoki today. (I think he made the remarks out of concern that Takaiichi’s chances of winning the election would increase and that a weaker yen could trigger inflation.) Let’s take a look

“Given the risk of inflation, the BOJ should raise interest rates closer to neutral levels to avoid a sharp rate hike in the future,” Naoki told a conference in Okinawa on Wednesday. He said Japan’s neutral rate was at least 1 percent and that the current policy rate was still far from neutral.

“Because it is difficult to determine exactly where the neutral rate is, the BOJ has no choice but to gradually raise interest rates to see where they are at above 1%,” he explained. Naoki cited growing inflation risks in Japan as the basis for the rate hike.

“Inflation is likely to be higher than previously expected,” he said. “The rise in food prices should not be viewed simply as a temporary factor, but close monitoring is needed.” “As the overseas economy shows moderate growth, Japan’s economic growth rate is likely to rise,” he said. “There is a possibility that the slowdown in the overseas economy will not be as serious as expected.” He added, “Many companies are maintaining an active facility investment stance.”

Naoki, however, said there was no need to raise interest rates to excessively tightening levels immediately. “At this point when there are both upside and downside risks, there is no need to raise rates sharply or tighten monetary policy,” he added. – Yonhap Infomax – “