Japan's Finance Minister Satsuki Katayama says President Trump raised concern about yen weakness during a summit with Prime Minister Sanae Takaichi, an unusually candid disclosure of normally confidential talks. The yen strengthened slightly after the remarks, while a separate minister said Japan's era of Abenomics-style reflation is over.
Trump presses Takaichi on the yen
President Donald Trump raised concern about the yen's weakness when he met Japanese Prime Minister Sanae Takaichi in New York on Tuesday, Katayama told a regular news conference. According to Reuters: "President Trump expressed concern about the yen's weakness", Katayama said, adding she disclosed the exchange after consulting the Prime Minister's Office. Takaichi responded that an undervalued yen is problematic as a general principle, Katayama said.
The unusual candor points to shared concern in Tokyo and Washington over the yen's continued slide despite their joint intervention on July 31. Katayama said the leaders' currency discussion reaffirmed that shared stance, including a commitment to counter excessive volatility and disorderly moves in the yen. She added that she and US Treasury Secretary Scott Bessent will keep communicating closely on foreign exchange.
Dollar rally meets bond-market stress
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 rose from 158.60 per dollar to trade around 158 after Katayama's remarks.
A weak yen is pushing up energy import costs already elevated because of the US-Israeli war on Iran, stoking concern about an inflation overshoot. Washington is also worried a selloff in Japanese government bonds could spill into the Treasury market. The benchmark 10-year Japanese government bond yield jumped to a 30-year high of 3.115% on Friday after a steep selloff in the US market.
Abenomics era declared over
At a separate briefing, Minoru Kiuchi, the minister for economic revitalisation and an ally of Takaichi's reflationist camp, said the phase of Abenomics-style reflation, built on monetary easing and agile fiscal spending, is over. His comments appeared to answer Bessent, who has suggested Japan's priority should be fighting inflation rather than stimulating growth.
Hirofumi Suzuki, chief FX strategist at Sumitomo Mitsui Banking Corp, said the remarks from both Katayama and Kiuchi reflect a heightened sense of concern over the yen's weakness, particularly after Tokyo conducted rate checks on Friday — a move often seen as a precursor to currency intervention.
Source: Investing.com
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