US President Trump is said to have directly conveyed his concerns about yen weakness to Prime Minister Takaichi Sanae (高市早苗) in New York, prompting a short-term reaction in the yen. Market attention is increasingly focused on coordination between Japan and the US on currency policy.
Finance Minister Katayama (片山) disclosed that Trump directly expressed his concerns about yen weakness when he met with Prime Minister Takaichi (高市) in New York. This renewed recognition of the high sensitivity of Japan-US currency issues, and the yen strengthened against the dollar in the short term.
Finance Minister Katayama (片山) disclosed part of the meeting's content and stressed that the disclosure had been coordinated with the Prime Minister's Office. Markets focused on his indication that Japan and the US intend to continue cooperating on currency matters.
As concerns about yen weakness intensified, the unusual reference to exchange rates by the leaders of Japan and the US shifted market focus to the monetary policy gap between the Bank of Japan and the Federal Reserve. With statements by senior Japanese government officials and reports of rate checks appearing one after another, market participants continued to monitor developments, including the possibility of intervention.
The yen recently approached the ¥160-per-dollar threshold, and the rate-hike outlooks of the Federal Reserve and the Bank of Japan, together with the interest-rate differential, were again recognized as central factors driving the yen. Going forward, changes in the policy environment and whether coordinated intervention occurs will remain key market focal points.