Japan says Trump voiced concern over weak yen in summit with PM Takaichi

TOKYO – US President Donald Trump raised concern about yen weakness during a summit with Japanese Prime Minister Sanae Takaichi, Japan’s Finance Minister Satsuki Katayama said, offering an unusually detailed account of the leaders’ talks on currencies.

“At the recent Japan-US summit meeting, President Trump expressed concern about the yen’s weakness,” Katayama said at a regular news conference, adding that she was disclosing the exchange for the first time after consulting with the Prime Minister’s Office.

Katayama’s frank account of leaders’ talks, which governments typically keep confidential, points to shared concern in Tokyo and Washington over the yen’s continued slide despite their joint intervention in July.

Takaichi, speaking to reporters later on Sept 25, confirmed Trump’s comments at their meeting, which took place in New York on Sept 22 on the sidelines of the UN General Assembly.

“The US side said that the weak yen was creating difficulties for their trade, and I responded that, as a general principle, an undervalued yen is problematic,” she said.

But she stressed that there was no discussion of monetary or fiscal policy at the summit, adding that the Takaichi administration’s economic policy stance remains unchanged.

Previously, Takaichi told reporters that she and Trump had held a “timely” discussion about China ahead of the US President’s planned summit with Chinese President Xi Jinping.

Japan, US to continue communicating ‘closely’

Katayama said the leaders’ discussion on foreign exchange reaffirmed the shared US-Japan stance behind their July 31 coordinated intervention, including a commitment to counter excessive volatility and disorderly moves in the yen.

“In the light of this summit meeting, Treasury Secretary (Scott) Bessent and I will continue to communicate closely on a range of matters, including foreign exchange,” she said.

Katayama’s comments were swiftly reinforced hours later when she held a call with Bessent, according to a statement from Japan’s Finance Ministry.

In a sign of Tokyo and Washington’s shared determination to address the weak yen, Katayama and Bessent reaffirmed that the currency’s undervaluation is a matter of concern and agreed to strengthen bilateral cooperation, the statement said.

The dollar has been rallying against the yen and other major currencies, driven by strong US economic data, a hawkish Federal Reserve and surging US bond yields.

The yen strengthened slightly after Katayama’s remarks, rising from 158.60 per dollar to trade at around 157.20.

The weak yen is driving up energy import costs that are already elevated due to the US-Israeli war on Iran, fuelling concerns about an inflation overshoot, a headache for Japanese policymakers and for the US, which is worried that a selloff in Japanese bonds could spill over into the Treasury market.

Surging bond yields

The benchmark 10-year Japanese government bond yield jumped to a 30-year high of 3.115 per cent on Friday following a steep selloff in the US market.

At a separate news conference, Minoru Kiuchi, the minister in charge of economic revitalisation and an ally of Takaichi’s reflationist camp, said the phase of Abenomics-style reflation policies, with monetary easing and agile fiscal spending, is over.

Kiuchi’s remarks appeared to respond to comments from Bessent, who recently suggested that Japan’s priority should be fighting inflation rather than stimulating growth, signalling concern about what he sees as lingering elements of Abenomics in Takaichi’s policies and among her political allies.

Hirofumi Suzuki, chief FX strategist at Sumitomo Mitsui Banking, said remarks by both Katayama and Kiuchi reflected a heightened sense of concern over the yen’s weakness, particularly after Tokyo conducted rate checks on Sept 25, a move that is often viewed as a precursor to currency intervention. REUTERS