Scott Bessent just told Japan what its own central bankers have been tiptoeing around for years: the era of massive economic stimulus is over, and it’s time to act like it.
The US Treasury Secretary, speaking at a G20 meeting in Asheville, North Carolina on August 31, called on Japanese authorities to phase out the expansionary policies that have defined the country’s economic strategy since 2013. His message was direct: Abenomics worked, deflation is gone, and now Japan needs to pivot toward fiscal responsibility and higher interest rates.
The $98.7 billion backstory
Bessent’s comments didn’t arrive in a vacuum. They came on the heels of Japan spending a record $98.7 billion in August to prop up the yen, a currency intervention effort that required rare coordination with the US around late July and early August.
The Bank of Japan had already started inching toward normalization before Bessent’s public nudge. In June 2026, the BOJ raised its policy rate target to approximately 1% from 0.75%, a move that would have seemed unthinkable during the years when negative interest rates were the norm in Tokyo.
