NHK reported on Tuesday, citing a senior U.S. Treasury official, that U.S. Treasury Secretary Scott Bessent urged Japanese officials to demonstrate a clear path toward fiscal sustainability and higher interest rates. ^[1] Japan's benchmark 10-year government bond yield rose 6 basis points on Tuesday to nudge above 3%, marking the highest level since 1996. ^[2] Japan's benchmark 10-year bond yield reached 3% in Tokyo on Tuesday for the first time since September 1996. ^[3] Japanese Finance Minister Satsuki Katayama said on Tuesday that the government will maintain close communication with markets after the benchmark 10-year yield rose above 3% overnight. ^[4] Scott Bessent, US Treasury Secretary, expressed firm support for decisive monetary measures to combat yen weakness during a meeting with Bank of Japan Governor Kazuo Ueda. ^[5] A Treasury under secretary told NHK that Bessent stressed the importance of clearly showing markets the path toward fiscal sustainability and interest-rate increases as Japan's next policy step. ^[6] Japanese Finance Minister Satsuki Katayama stated that the U.S. and Japan agreed to continue their coordinated effort to achieve 'orderly' moves in the yen to ensure global market stability. ^[7] The yen was last trading at 160.1 per dollar, breaching the 160 level which some traders see as increasing the likelihood of further currency intervention. ^[8] U.S. Treasury Secretary Scott Bessent told CNBC that he expects the Japanese government and the Bank of Japan to take actions to lead to a stronger yen. ^[9] Bessent and Ueda agreed that the central bank should increase borrowing costs at its upcoming meeting scheduled for September 17 and 18. ^[10] The US Treasury reported that Bessent urged the Bank of Japan to anchor inflation expectations and avoid excessive yen volatility through solid monetary policy during the meeting. ^[11] Japan's two-year bond yield hit a 31-year high, significantly lifting costs for the yen carry trade which had been near zero for a generation. ^[12]