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Japan said it had received “full understanding” from US Treasury secretary Scott Bessent on its approach to currency markets after mounting pressure from Donald Trump’s administration over the weak yen and repeated interventions in exchange markets.
Finance minister Satsuki Katayama said that she and Bessent had “discussed market developments, including moves in the exchange rate”.
“We agreed that we are co-ordinating extremely well on recent market moves, including exchange rates,” Katayama told a press conference on Tuesday after the 25-minute meeting.
Bessent wrote on X that “communication and coordination . . . in addressing undesirable, excess volatility in currency markets continues to be constant and robust”.
He added that the sides discussed the US-Japan trade investment agreement, critical minerals and Tokyo’s efforts to build a foreign investment screening system.
The yen weakened about 0.3 per cent against the dollar to ¥157.67 on Tuesday, after having risen to about ¥156.30 following Japan’s suspected intervention last week.
Japan has spent an estimated $63.7bn intervening in currency markets to support the yen over the past two weeks, according to foreign exchange analysts, but the currency is now trading around levels where markets expect authorities to step in again.
Bessent, who is due to meet Japan’s Prime Minister Sanae Takaichi later on Tuesday, has expressed concern over the yen-dollar exchange rate, which the Trump administration believes unfairly favours Japanese exporters.
But he has suggested that he would prefer the Bank of Japan tightening monetary policy to support the yen rather than authorities intervening directly in currency markets.
Rate increases are viewed by many economists as creating a deeper and longer-term support currency support, and the US and Japan agreed in a joint statement in September that currency intervention should be reserved for reducing excessive market volatility.
Katayama declined to comment on whether she and Bessent discussed Japanese monetary policy. Following his meeting with Takaichi, the Treasury secretary will travel to South Korea before joining Trump in Beijing for a summit with China’s Xi Jinping.
Yujiro Goto, forex strategist at Nomura, said that Katayama’s comments had not provided the sort of result that pointed to further intervention and would have pushed the yen higher.
But he added that “if the yen falls further towards the ¥158 or ¥159 level, there is a still a chance of further interventions”.
Currency analysts had speculated that Tokyo would seek to use Bessent’s visit to draw out a clear US endorsement of Japan’s intervention efforts. A weak yen pushes prices higher and hits households hard in a country dependent on imported energy, food and other materials.
Government figures released on Tuesday showed that Japanese household spending fell 2.9 per cent in March from a year earlier, a much steeper decline than economists had anticipated. Consumer confidence has dropped sharply following the outset of conflict in the Middle East.
Economists are increasingly split on whether the BoJ is likely to raise rates at its next meeting in June.
The central bank held rates at about 0.75 per cent at its April meeting despite hawkish pressure from three members of its policy committee, and governor Kazuo Ueda is weighing the risks of falling behind the curve on taming inflation and concern that a prolonged war in Iran could tip Japan’s economy into recession.
A summary of opinions from the April policy meeting published on Tuesday revealed a split BoJ wrestling with strong arguments for a rate increase sooner rather than later.
The yield on Japan’s benchmark 10-year government bond rose to a 30-year high of 2.545 per cent on expectations of a possible rate rise at the June meeting.
