Will Bessent’s intervention mark a turning point for the yen?

ING argues the Japanese yen remains about 20% undervalued versus the U.S. dollar, despite late-July joint U.S.-Japan intervention to support the currency. The note says Treasury Secretary Scott Bessent has staked political capital on the effort, and markets now price roughly a 75% chance of a Bank of Japan rate hike in September. ING’s models still show USD/JPY overvalued by more than 20% through 2026, but it says durable yen strength will require higher domestic returns, stronger Japanese growth, and policy support that keeps capital onshore. ING’s base case is still for USD/JPY to end 2026 at 158 and 2027 at 152, implying only gradual yen appreciation rather than a sharp reversal.