Yen Hits Seven-Month High... Bessent Says, "Bet Against Me if You Want"

【Financial News, Tokyo = Correspondent Hye-jin Seo】The Japanese yen rose to the mid-153-yen range against the dollar on the 9th. The move came as speculative short-yen positions were rapidly unwound amid expectations that the Bank of Japan (BOJ) will accelerate its pace of rate hikes. U.S. Treasury Secretary Scott Bessent also warned market participants betting on a weaker yen, saying, "Bet against me if you want."
According to Nihon Keizai Shimbun, the yen stood at 153.50–153.52 per dollar as of noon, up 0.30 yen from 5 p.m. the previous day. During the session, it rose as high as 153.25 per dollar.
In overnight New York foreign-exchange trading, the yen briefly climbed to 152.89 per dollar, its highest level in about seven months. The currency has risen approximately 4% this month.
The key driver of the yen's strength is the outlook for a BOJ rate hike. According to Kyodo News the previous day, the BOJ plans to raise its policy rate from the current 1.0% to 1.25% at its monetary policy meeting on the 17th and 18th.
A September rate hike has already been largely priced in, and attention has shifted to whether there will be another increase later this year. As expectations for higher rates grow, short-yen/long-dollar positions and yen carry trades are being unwound rapidly. After the meeting, market participants are expected to assess the possibility of further hikes at a press conference by BOJ Governor Kazuo Ueda.
The United States' support for a stronger yen is also helping to alter exchange-rate trends. At an event held on the 8th local time at Southern Methodist University in Texas, Bessent said, "People say the Treasury secretary is taking a risk, but I have asymmetric information."
The former hedge-fund manager emphasized, "Right now, I am the house," adding, "When I intervene in the yen market, I know very well what the Japanese government, the BOJ and policymakers are trying to do. Bet against me if you want."
On July 31, Bessent unusually joined the Japanese government in buying yen. Since then, he has continued urging the BOJ to respond through monetary policy, arguing that yen weakness is fueling inflation in Japan. With BOJ rate hikes coinciding with U.S. efforts to support the yen, analysts say the prolonged yen depreciation may be reaching a turning point.
The shift is also appearing in technical indicators. The 21-day moving average for the dollar-yen exchange rate is nearing a 'death cross,' in which it falls below the 200-day moving average from above. This is a bearish signal from the dollar's perspective, but it represents a shift toward yen strength—a 'golden cross' from the yen's perspective.
As of the previous day, the 21-day average was 158.50 yen per dollar, while the 200-day average was 158.42 yen. As the yen strengthened again on the 9th, the 21-day average began moving below the 200-day average. If the trend is confirmed, it would be the first such occurrence in 11 months, since October 2025, and the first since the Sanae Takaichi administration took office.
However, it remains uncertain whether the yen's strength will continue. If worsening tensions in the Middle East send international oil prices sharply higher, Japan's trade deficit could widen because it is an energy importer, putting downward pressure on the yen. On the 9th, October West Texas Intermediate crude oil (WTI) futures reached $94.78 per barrel intraday, their highest level in about three months.
The market is watching the exchange-rate forecast of 152.57 yen per dollar, presented by Japanese companies in the BOJ's Tankan corporate survey in June, as the next key threshold. Analysts say that if the yen moves beyond this level, it could enter a full-fledged yen-strengthening phase rather than merely seeing a short-term unwinding of speculative positions.
[email protected] Hye-jin Seo Reporter