Japan’s and US finance ministers met in Asheville, North Carolina, and confirmed their policy of continuing coordinated intervention to stabilize the yen. Finance Minister Katayama said an orderly yen exchange rate is essential to the stability of global financial markets.
Japan’s and US finance ministers met in person on 31 August. It was their first meeting since shortly after Japan and the US began coordinated yen-buying intervention, and was held on the sidelines of the G20 Finance Ministers and Central Bank Governors’ Meeting.
The two sides reaffirmed the significance of coordinated intervention. Katayama explained Japan’s policy of steadily reducing its debt balance as a percentage of gross domestic product (GDP), as well as its intention to secure alternative funding for a consumption tax cut without relying on deficit-financing government bonds. Bessent reportedly raised no objection.
Total intervention during the period from 30 July to 26 August, including the intervention period, amounted to ¥15.3 trillion, setting a new monthly record. The yen, which was trading at around ¥164 to the dollar before the intervention, strengthened by approximately ¥8 afterward, and views are spreading that it is now moving back into the ¥160 range.
The US increasingly appears to believe that the Japan-US interest-rate differential is a factor behind the yen’s weakness and is pressing Japan to raise rates. Katayama responded that specific monetary policy tools are left to the Bank of Japan and that discussions have not reached that point for now.