The US Secretary Scott Besent and Finance Minister of Japan Shunichi Kato discussed important issues related to the economic relationship between the US and Japan, including global security and bilateral commercial discussions in progress between the US and Japan.
Outstanding comments
He said at the G7 meeting that US tariffs are creating uncertainties
He discussed overcapacity with G7.
He told the G7 that the unsustainable macroeconomic imbalance of some countries is behind the commercial imbalance.
He told the G7 that each country must take measures to boost domestic demand and reduce the fiscal deficit.
The conversation with Besent lasted 30 minutes.
He met with the US Treasury Secretary Bessent today.
He told Besent that US tariffs are unfortunate.
He agreed with Besent that change rates must be established by the markets.
He reaffirmed that excessive volatility in currency movements has adverse impacts on economic and financial stability.
There was no talk about currency levels.
Market reaction
At the time of writing, the USD/JPY torque is quoting 0.08% lower in the day, operating in 144.75.
And in Japanese faqs
The Japanese Yen (JPY) is one of the most negotiated currencies in the world. Its value is determined in general by the march of the Japanese economy, but more specifically by the policy of the Bank of Japan, the differential between the yields of the Japanese and American bonds or the feeling of risk among the operators, among other factors.
One of the mandates of the Bank of Japan is the currency control, so its movements are key to the YEN. The BOJ has intervened directly in the currency markets sometimes, generally to lower the value of YEN, although it abstains often due to the political concerns of its main commercial partners. The current ultralaxy monetary policy of the BOJ, based on mass stimuli to the economy, has caused the depreciation of the Yen in front of its main monetary peers. This process has been more recently exacerbated due to a growing divergence of policies between the Bank of Japan and other main central banks, which have chosen to abruptly increase interest rates to fight against inflation levels of decades.
The position of the Bank of Japan to maintain an ultralaxa monetary policy has caused an increase in political divergence with other central banks, particularly with the US Federal Reserve. This favors the expansion of the differential between the American and Japanese bonds to 10 years, which favors the dollar against Yen.
The Japanese Yen is usually considered a safe shelter investment. This means that in times of tension in markets, investors are more likely to put their money in the Japanese currency due to their supposed reliability and stability. In turbulent times, the Yen is likely to be revalued in front of other currencies in which it is considered more risky to invest.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
