USD/JPY: Yen Surges Against US Dollar After Bessent Slams BoJ for Being ‘Behind the Curve’

US dollar slipped 0.7% as traders rushed to scoop up its Japanese peer in hopes that Bessent’s comments will trigger a policy change.

💴 Yen Jumps on Bessent’s BoJ Critique

• The USDJPY pair dropped 0.7% Thursday to ¥146.20 from ¥147.40 as traders piled into the yen following pointed remarks from US Treasury Secretary Scott Bessent.
• Bessent told Bloomberg TV that the Bank of Japan is “behind the curve so they are going to be hiking and they need to get their inflation problem under control.”
• His comments sparked speculation that a shift in BoJ policy could be coming sooner than markets had priced in, giving the yen a rare intraday boost.

📢 Japanese Monetary Policy Under Attack

• Bessent said Japan has “an inflation problem” and needs to act faster — a marked departure from the usual US policy agenda of avoiding public critiques of foreign central banks.
• He linked Japan’s ultra-loose stance to rising global long-term bond yields, suggesting it’s affecting yields in the US and Germany as well.
• Bessent added that he has spoken directly with BoJ Governor Kazuo Ueda about the matter, but he didn’t say what Ueda’s position was or if central bankers in Japan were weighing a hike anytime soon.

🏦 BoJ Unmoved Despite Sticky Inflation

• The BoJ left rates unchanged at 0.5% in late July and offered no guidance on when hikes might come, even after raising its inflation forecasts.
• Headline inflation in Japan has been above the BoJ’s 2% target for more than three years, driven by higher food and raw material costs.
• Ueda insists the risk of falling behind is “not particularly high,” maintaining that Japan’s gradual approach remains the right course.