The yen recorded its sharpest gain in nearly two weeks on Thursday after US Treasury Secretary Scott Bessent predicted that Japan would raise interest rates to curb inflation. Japan’s currency climbed as much as 0.7% against the dollar following Bessent’s remarks that the Bank of Japan is lagging in its inflation fight and is likely to hike rates.
The stronger yen pressured Japanese equities, with the Nikkei falling 1.4%, while a broader Asian shares index slipped 0.4%, weighed down by technology stocks. In the US, S&P 500 futures eased 0.2% after the index closed at a record high on Wednesday. European markets are also expected to open lower.
Meanwhile, Bitcoin hit a fresh all-time high and gold prices rose. The US dollar index declined as Bessent also signaled his support for a Federal Reserve policy easing.
“When Bessent talks, markets listen, and now he wants a stronger yen,” noted Rodrigo Catril, strategist at National Australia Bank Ltd. “In recent days, markets appear to be paying more attention to his words, especially with his underlying push to weaken the dollar.”
