United States Treasury Secretary Scott Bessent confirmed that Washington and Tokyo are maintaining “constant and robust” coordination to address excessive volatility in foreign exchange markets. The reaffirmation came after meetings in Tokyo with Japanese Finance Minister Satsuki Katayama and other officials.
In a post on X, Bessent stated, “The level of communication and coordination between our teams in addressing undesirable, excess volatility in currency markets continues to be constant and robust.” Discussions also covered the US-Japan investment agreement, cooperation on critical minerals, and support for Japan’s investment screening mechanism.
The Japanese yen strengthened sharply on the comments, with USD/JPY dropping to near 156.70 before recovering to around 157.45. The initial move highlighted market sensitivity to any US acknowledgment of Japan’s intervention efforts to support its weakening currency. Katayama emphasized that Japan’s response remains consistent with a joint statement signed last September, which allows foreign exchange intervention when excessive volatility threatens economic stability.
Both sides avoided publicly discussing the Bank of Japan’s monetary policy, though some analysts had expected Bessent to encourage faster rate hikes. BOJ Governor Kazuo Ueda is scheduled to return to Tokyo soon, and it remains unclear if he will meet Bessent. The coordination signals a rare public alignment on exchange rate policy between the two economic giants, aiming to prevent disorderly market conditions and provide predictability for global businesses and traders.
