USD/JPY drops 0.6% to 146.40 on Bessent's BOJ rate hike comments

USD/JPY has fallen 0.6% to 146.40, marking three-week lows after US Treasury Secretary Scott Bessent publicly urged the Bank of Japan to raise interest rates. The yen strengthened across the board following Bessent's unusual intervention in Japanese monetary policy, which traders interpreted as potential US administration support for a stronger yen. The comments have reignited speculation about BOJ policy normalization, with markets now pricing in higher probability of rate hikes in coming meetings. Technical analysis shows USD/JPY breaking below key support at 147.00, with immediate targets at 146.00 and potentially 145.50. The Nikkei index has also reacted negatively to yen strength, declining as exporters face headwinds. Traders are monitoring whether Japanese officials will respond to Bessent's remarks and any shifts in BOJ communication regarding their ultra-loose monetary stance.