彭博分析文：贝森特公开施压使日本央行在9月17-18日会议陷入"不加息则日元暴跌、加息则效果有限"的两难，25bp加息已被市场近100%定价

Bank of Japan Governor Kazuo Ueda faces unusually acute risks of financial-market turbulence as he approaches this month’s policy decision in the wake of a public pressure campaign by US Treasury Secretary Scott Bessent.

Any failure to follow Bessent’s barely camouflaged calls to raise interest rates would now not only surprise traders who fully expect a move, but also send the yen tumbling. That in turn would boost the outlook for inflation, which is already seen heading toward 3% later this year.

Yet simply raising the 1% benchmark by 25 basis points — something that would mark an acceleration in the BOJ’s cycle — may offer Ueda, 74, little bang for his buck. A hawkish fellow board member, Hajime Takata, Wednesday floated the potential for an outsized move, potentially further diminishing the impact of a quarter-point hike.

Bessent’s efforts may prove helpful in one respect, as they likely make it more difficult for Prime Minister Sanae Takaichi to try to slow the BOJ down in her broader mission to run Japan’s economy hot. That too carries risk, however.

“After the US spoke this much, I think it would be problematic if the BOJ fails to act,” said Ayako Fujita, chief Japan economist at JPMorgan Securities. “But if the BOJ is perceived as being unable to raise rates without a tailwind from the US, that causes a big risk regarding the effectiveness of a rate hike.”

Ueda and his colleagues also approach their Sept. 17-18 meeting with a bond mark on edge, after a selloff in recent weeks that’s taken yields to the highest levels since the mid-1990s. Futures and swaps trading shows investors have fully priced in 25 basis point move.

Rising yields are a key reason Bessent began voicing his calls for BOJ tightening last year, amid concern volatility in the Japanese government bond market will spill over into the US. The Treasury chief has also sought to arrest declines in the yen that make it more likely for Tokyo to sell down its Treasuries holdings.

Read more: Yen Surges With Traders on High Alert for Further Intervention

Japan’s 10-year yields, once seen as something of an anchor for yields globally, hit 3% for the first time since 1996 on Tuesday. Their US equivalents neared 4.82% Wednesday, the highest since before Bessent took office.

“Bessent is urging the BOJ to raise rates because he believes this will help curb the rise in global bond yields — an outcome that would also benefit the US,” said Nobuyasu Atago, chief economist at Rakuten Securities Economic Research Institute and a former BOJ official.

How effective BOJ tightening may prove for longer-term yields remains to be seen. A key narrative in both the US and Japan has been escalating concerns over budget deficits — which neither the Takaichi government nor the Trump administration have proposed tackling in earnest.

“The current pace of the rise in long-term interest rates isn’t really the BOJ’s fault,” said JPMorgan’s Fujita. “What’s essentially needed to slow down both the weak yen and the rise in long-term interest rates is a credible fiscal message from the government.”

‘Right Thing’

Bessent kept up his pressure in recent days via a flurry of posts, interviews and meetings in which he encouraged the Japanese central bank to “do the right thing,” and called for Tokyo to end its reflationary policy. He met Ueda at a G20 gathering in North Carolina earlier this week, and discussed “the importance of sound policy formulation to anchor inflation expectations and avoid excess currency volatility.”

Ueda, meanwhile, has done nothing to suggest the BOJ will wait until October. He said after the G20 confab that the board will decide on policy with upward price risks in mind — hinting at the likelihood of a September hike.

That message was reinforced by Takata on Wednesday, when the BOJ board’s biggest hawk also floated the idea of back-to-back rate increases. The central bank had waited six months before its most recent hike, in June.

Read more: BOJ Board Hawk Takata Leaves Door Open for Outsized Rate Hike

Ueda has emphasized the importance of careful communication around policy decisions since drawing criticism over a July 2024 tightening move that caught some traders off guard, and contributed to global market volatility. That rate increase took place with overnight swaps implying around a 60% probability of a hike.

Yen Danger

Opting against an increase this month — with swaps around the 100% mark — would likely send the yen plunging, and risk a severe reaction from Bessent, who took the unusual step of joining Japan to buy the yen on July 31.

That first such joint operation since 1998 took the currency close to 155 per dollar from around 164, the lowest level since 1986. The yen was trading around 158.72 Wednesday in New York, climbing on the day as traders were on watch for potential further intervention.

“The BOJ needs to hike and deliver a more forceful message lest they undo all the work done so far with respect to the yen,” said James Athey, a fund manager at Marlborough Investment Management Ltd. in London. “We believe the BOJ made a critical error in not hiking at the July meeting, after the stage had been set by the intervention and the political rhetoric.”