Trump raises concern over weak yen and US trade impact in Japan talks
Japan and the US have left the door open to further coordinated intervention as the yen remains under pressure despite the Bank of Japan’s latest rate increase.
- During a meeting with Japan's Prime Minister, President Trump expressed concern that the weak yen is making trade difficult for the United States.
- The discussion comes as the yen continues to depreciate against the dollar, despite recent actions by the Bank of Japan.
- The two countries, which conducted a coordinated yen-buying intervention in July, have affirmed that further joint action to support the currency remains a possibility.
Concerns over the yen’s depreciation featured in this week’s Japan-US leaders’ meeting, with Japanese Prime Minister Sanae Takaichi saying on Friday (September 25) that US President Donald Trump told her the weaker currency was making trade difficult for the United States.
Speaking to reporters at the prime minister’s office in Tokyo, Takaichi said she replied that an undervalued yen was a problem in general terms.
She said the two leaders did not go on to discuss monetary or fiscal issues during Tuesday’s bilateral meeting in New York.
“There is no change in the Takaichi administration’s stance. We will achieve a strong economy and fiscal sustainability at the same time under the banner of responsible and proactive public finances,” Takaichi said.
The exchange came as the yen remained under selling pressure.
The dollar rose rapidly from below 157 yen and briefly moved above 159 yen early Friday, even after the Bank of Japan raised its policy interest rate on September 18.
On the night of the rate increase, the central bank also carried out a “rate check”, asking financial institutions about currency rate levels in a move believed to be a precursor to intervention.
Some in the market believe the Japanese side sought to restrain yen selling by showing that Tokyo and Washington had confirmed at summit level the need to correct the currency’s weakness.
The yen’s weakness, however, is unlikely to ease while expectations remain strong that the gap between US and Japanese interest rates will not narrow.
The US Federal Reserve is seen raising interest rates again this year because of inflation concerns linked to higher crude oil prices.
Finance Minister Satsuki Katayama had earlier said on Friday that Trump expressed concern about the yen’s falls during his meeting with Takaichi.
Japan and the United States had already conducted coordinated yen-buying intervention in late July, their first such joint action in about 28 years, in an effort to correct the Japanese currency’s weakness.
Katayama and US Treasury Secretary Scott Bessent have not ruled out further coordinated intervention.
Katayama said such a policy was affirmed at the bilateral summit.
“I will continue to closely communicate with Secretary Bessent on various matters, including foreign exchange rates,” Katayama said.
[Copyright The Jiji Press, Ltd.]
