Japan and US Agree to Coordinate to Stabilise Yen Exchange Rate
Japanese Finance Minister Satsuki Katayama and US Treasury Secretary Scott Bessent have agreed on the importance of continuous coordination to ensure that yen exchange rate movements remain controlled. This agreement was reached to maintain global financial stability, which has been shaken by fluctuations in the Japanese currency.
The bilateral meeting took place on Monday (31/8) on the sidelines of the G20 finance ministers and central bank governors meeting in Asheville, North Carolina. Katayama emphasised that the stability of the yen has a systemic impact on international markets.
“We reaffirm that a controlled yen exchange rate is vital for the stability of global financial markets, including in the United States, and that ongoing coordinated efforts between Japan and the US contribute to achieving this common goal,” Katayama stated following the meeting.
The two officials reviewed the effectiveness of recent joint interventions. This measure represented the first coordinated yen-buying intervention since the 1998 Asian financial crisis, triggered by the yen weakening to its lowest level in 40 years.
Although Japan injected 15.4 trillion yen—the highest figure in history—between late July and August, the strengthening of the yen proved temporary. The currency weakened again, surpassing the psychological level of 160 per US dollar last weekend, erasing much of the gains from previous interventions.
Katayama declined to provide an assessment of whether current yen movements are considered orderly or not. However, he gave a strong signal that Tokyo remains prepared to take decisive action against fluctuations deemed disorderly or speculative.
On the other hand, Scott Bessent previously anticipated that the Japanese Government and the Bank of Japan (BoJ) would take further steps to encourage the strengthening of the yen. Nevertheless, during the 30-minute meeting, senior officials from the Japanese Ministry of Finance noted that Bessent did not present any specific requests to the Japanese side.