Japan, US agree on need for continued coordination to stabilize yen

Japan and the US agreed that continued coordination is essential to ensuring orderly movements in the yen and maintaining global financial stability, Japanese Finance Minister Satsuki Katayama said Monday.

Katayama met US Treasury Secretary Scott Bessent on the sidelines of a two-day Group of 20 finance ministers and central bank governors meeting in Asheville, North Carolina.

“We confirmed that an orderly yen exchange rate is essential for the stability of global financial markets, including those of the United States, and that the continued coordinated efforts of Japan and the United States contribute to achieving this shared objective,” she told reporters after the meeting.

The two officials also reaffirmed the significance of their countries’ recent joint intervention in the foreign exchange market, Katayama said.

The meeting came about a month after Japan and the US conducted their first coordinated yen-buying intervention since the 1998 Asian financial crisis.

The intervention was launched on July 31 after the yen weakened to a 40-year low near 164 against the dollar.

Japan spent a record 15.4 trillion yen ($96 billion) between late July and August to support its currency, according to data released by the Finance Ministry last week.

The move initially strengthened the yen, but the currency subsequently erased those gains and weakened beyond the psychologically important level of 160 against the dollar late last week.

Katayama declined to say whether the yen’s recent movements were orderly but stressed that Tokyo remained prepared to take decisive action against disorderly fluctuations.

The yen’s weakness has largely been driven by the wide interest-rate gap between Japan and the US. Although a weaker currency supports Japanese exporters, it also raises the cost of imported energy, food and raw materials, weighing on household consumption.

Ahead of the meeting, Bessent said he expected the Japanese government and the Bank of Japan to take further steps that would lead to a stronger yen.

A senior Japanese Finance Ministry official, however, said Bessent did not make a specific request during the roughly 30-minute meeting, according to Kyodo news.

Katayama also briefed Bessent on Japan’s efforts to balance economic growth with fiscal sustainability amid concerns over the country’s heavy public debt burden.