BOJ 'ready to act' if US defaults on debt

Japan's central bank chief, Ueda Kazuo, said Friday that a US debt default would have serious consequences for the global economy, but that the bank would respond to such a scenario by taking swift action to restore stability.

Ueda noted that US government bonds are used as collateral in a range of financial transactions and form a core of financial markets. He said the bank has to prepare for the possibility of a default, which would have a major impact on many transactions.

Ueda said US congressional leaders are working hard to avert a crisis. But he said if the worst comes to pass, the BOJ will take rapid action based on economic factors, commodity prices, and financial situations.

US President Joe Biden is in Japan for the G7 Summit. But he's planning to head home Sunday for a last-ditch effort to negotiate an end to the standoff.