Scott Bessent Weighs in on BoJ Policy, Sending Both JGB Yields and the Yen Higher

Treasury Secretary pressures Fed to cut and BoJ to hike

Highlights

• Treasury Secretary pressures Fed to cut and BoJ to hike

• Real yields on the long bond are near record highs

• Technical indicators point to an overbought S&P 500…

• … while a low VIX suggests “maximum greed”

Key Takeaways

• Scott Bessent Triggers a Yen Rally: The yen has strengthened +0.6% to ¥146.5 following comments from Scott Bessent that the BoJ has fallen behind the curve and must start to hike rates. The Treasury Secretary has moved from pressuring the Fed to cut by as much as -50 basis points to opining about Japanese monetary policy.