– When a major meltdown in Japanese bonds spilled over into US Treasuries during Scott Bessent’s high-profile visit to Davos in January, he had more than a few words for his Japanese counterpart.
Most Read from Bloomberg The US Treasury secretary embarked on what Japanese officials viewed as more of a reprimand than a typical catch-up with Finance Minister Satsuki Katayama on the sidelines of the World Economic Forum, according to people familiar with the matter, who spoke on condition of anonymity to describe the private exchange
According to one of the people, Bessent fired off points so rapidly, her note-taking aide struggled to keep up. The people didn’t reveal details of his requests. Bessent also piled public pressure on Katayama, telling Fox Business he’d spoken with his Japanese counterparts and was “sure” they’d speak to end the volatility.
Shortly after, she urged markets to calm down, emphasizing that Japan was pursuing a “responsible and sustainable” fiscal policy, a message that appeared to settle some of the nervousness among investors over the nation’s spending plans. The episode shows how Bessent — who placed some of his most fruitful bets in Japan during his former career as a hedge fund manager — is taking an unusually assertive approach to shaping the economic trajectory of America’s top Asian ally. With the US continuing to borrow more, the Trump administration is unlikely to welcome developments in Japan that indirectly bump up already elevated Treasury yields.