TOKYO – Two words sprang to mind when the Bank of Japan lifted its policy rate to a 31-year high of 1.25% on Friday: Scott Bessent. No, the US Treasury secretary didn’t cause the 25-basis-point increase announced by Governor Kazuo Ueda. The BOJ was responding to a far more pressing reality: inflation continues to outpace economic growth. Consumer prices are rising at a 1.9% annual rate while GDP expanded just 0.4% quarter-on-quarter in the April-June period.

Yet Bessent has inserted himself into BOJ deliberations and yen policy so aggressively that Japan’s Finance Minister Satsuki Katayama recently described the situation as “scary.” She was referring in part to Bessent’s startling declaration: “I am the house now. … I have pretty good insight into what the Bank of Japan is going to do, what Japanese policymakers are going to do. You can bet against me if you want.”

The problem for Bessent is that some of the most important people in Tokyo appear to be doing exactly that. The two BOJ board members appointed by Prime Minister Sanae Takaichi since she took office last October, Toichiro Asada and Ayano Sato, both dissented from Friday’s rate increase, producing a 7-2 split. Their opposition reinforced the perception that Takaichi remains firmly against further tightening. She has previously dismissed the very idea of additional rate hikes as “stupid.”

That leaves one of the biggest questions facing the BOJ ahead of its October and December meetings: how united is Team Ueda on the need to keep normalizing policy?