Japanese and U.S. finance ministers confirmed coordination to stabilize the yen, while long-term interest rates briefly rose into the 3% range. The meeting was their first in-person talks since the coordinated intervention at the end of July, and coordination between the two countries is expected to continue influencing the yen and interest-rate trends.
At a meeting held in conjunction with the G20, the Japanese and U.S. finance ministers shared the view that an orderly yen market is essential to the stability of global financial markets and confirmed that they would continue to coordinate their response. The talks were the first in-person discussions between Japan and the United States since the two countries carried out a coordinated yen-buying intervention.
Finance Minister Katayama Satsuki (片山さつき) explained that yen stability is important to international financial markets and indicated a willingness to cooperate toward shared objectives, including those of the United States. Markets had been focused on the yen's weakening since the summer and the Bank of Japan's policy stance.
U.S. Treasury Secretary Bessent indicated that the Japanese government and the Bank of Japan would take measures conducive to a stronger yen. As policy statements from the U.S. side have grown more forceful, the Japan-U.S. talks have become an issue with implications for policy management more broadly. Meanwhile, long-term interest rates in the domestic bond market rose, with the yield briefly reaching 2.99% on 1 September and 3.015% on 2 September.
Bank of Japan Governor Ueda indicated that the Bank would carefully consider whether to raise rates at each monetary policy meeting, including the next one. Markets increasingly expect Japan-U.S. coordination and JGB management to be focal points going forward.