Treasury Secretary Scott Bessent Hints at Stronger Yen Amid US Bond Selloff
The U.S. bond market is experiencing a significant selloff, with Treasury yields reaching their highest levels since early 2025 as the 10-year yield climbed to approximately 4.78%. This trend has been exacerbated by rising geopolitical tensions in the Middle East and increasing oil prices above $91 per barrel for Brent crude (CL=F), which have reignited inflation concerns. Treasury Secretary Scott Bessent, speaking at a G20 finance leaders' meeting, indicated that Japan is likely to take actions leading to a stronger yen. He suggested these measures could include interest rate hikes by the Bank of Japan and structural reforms aimed at fiscal sustainability. Despite previous interventions failing to stabilize the yen near 160 per dollar, Bessent emphasized policy reform over direct market intervention. Markets are now pricing in an increasing likelihood of a BOJ rate hike as early as September, with analysts forecasting three hikes within the next year. Japan's 10-year government bond yield has surged to 3%, its highest since 1996.
Topics: central bank policy geopolitical tensions Treasury yields yen strengthening expectations