US Treasury Secretary Bessent tells Japan to raise interest rates, and markets are already pricing it in

Scott Bessent, the US Treasury Secretary, has done something unusual for an American finance chief: he’s openly telling another sovereign nation to tighten monetary policy. His recommendation that Japan raise interest rates marks a significant departure from decades of US diplomatic norms around central bank independence, and markets are reacting accordingly. Swap traders now see roughly an 88% probability that the Bank of Japan will hike rates again following Bessent’s latest comments. What Bessent is actually asking for The Treasury Secretary’s push isn’t a one-off remark at a press conference. He’s been advocating for more BOJ policy independence since October 2025, urging Japanese authorities to give their central bank room to raise rates and rein in wild currency swings. The BOJ already lifted its policy rate to 1% in June 2026, its highest level since 1995. For context, Japan spent most of the last three decades with rates at or below zero, so even 1% feels like a different economic universe for Tokyo. Bessent has framed this as the definitive end of Abenomics-style reflationary policies, the ultra-loose monetary experiment named after former Prime Minister Shinzo Abe that de...