Bézançon "warns" Japan: Strong fundamentals, excessive exchange rate volatility is undesirable

US Treasury Secretary Bessent has made remarks regarding the Japanese economy and exchange rate issues, injecting a dose of stabilizer into the recently turbulent foreign exchange market.

On Tuesday local time, Bessent posted on social media X, stating that the fundamentals of the Japanese economy are strong, excessive exchange rate volatility is undesirable, and expressing full confidence in Bank of Japan Governor Kazuo Ueda's successful guidance of monetary policy.

After these remarks were published, the USD/JPY exchange rate immediately fell to an intraday low.

Bessent indicated that he had a conversation with Bank of Japan Governor Kazuo Ueda that day, and expressed clear confidence in Ueda's successful guidance of Japan's monetary policy. This statement is intended to send a signal to the market that the US and Japan are maintaining communication and coordination on monetary policy, helping to ease concerns about bilateral exchange rate friction.

In addition to bilateral communication, Bessent also had constructive discussions with G7 counterparts, covering topics such as the global economic situation, global imbalances, and critical mineral supply. The scope of these topics suggests the current focus of multilateral financial dialogue has gone beyond traditional macroeconomics and extended to structural issues such as supply chain security.

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