Japan Denies Currency Manipulation Ahead of Key US Talks

Japan Denies Currency Manipulation Ahead of Key US Talks

Finance Minister Responds to Trump’s Accusations

Japanese Finance Minister Katsunobu Kato rejected accusations from U.S. President Donald Trump that Japan manipulates its currency to gain a trade advantage. Speaking in parliament on Friday, Kato stated, “Japan does not manipulate the currency market to intentionally weaken the yen,” and pointed out that Japan’s most recent intervention involved buying yen, a move that strengthens rather than weakens the currency.

Possible U.S.-Japan Finance Meeting in Washington

Kato is scheduled to visit Washington next week to attend the G20 finance leaders’ gathering and the spring IMF meetings. While no official date has been set, he may hold a bilateral meeting with U.S. Treasury Secretary Scott Bessent. This potential meeting would provide the first opportunity for the two finance chiefs to directly address currency exchange rate concerns, which have become a point of contention in broader tariff negotiations.

Currency Talks Separate from Trade Discussions

Japan’s top trade negotiator, Ryosei Akazawa, confirmed that currency matters were not discussed during recent trade talks with the U.S. Instead, both sides deferred these issues to be handled by their finance ministers, in line with an earlier agreement between their leaders. Akazawa added, “If the U.S. side desires, Finance Minister Kato will likely engage in discussions on exchange rates,” noting that such talks would be part of a wider bilateral trade agreement.

U.S. Pressure to Weaken the Dollar

The yen’s recent appreciation is partly attributed to expectations that the U.S. may push for a coordinated effort to weaken the dollar. In March, President Trump told the leaders of Japan and China that they should stop reducing the value of their currencies, arguing that it was unfair to the United States. Treasury Secretary Bessent has also expressed interest in addressing exchange rates, as well as tariff and non-tariff barriers.

BOJ Remains Cautious on Monetary Policy

Bank of Japan (BOJ) Governor Kazuo Ueda declined to comment on currency levels when questioned in parliament. He reiterated that the BOJ would continue raising interest rates only if the economic outlook aligns with its projections. “We will guide monetary policy appropriately from the standpoint of stably and sustainably achieving our 2% inflation target,” Ueda said.

Market Implications and Upcoming Decisions

With the BOJ’s next policy meeting scheduled for April 30–May 1, expectations are that interest rates will be held steady at 0.5%. Analysts also anticipate a downward revision to Japan’s growth forecast due to global economic uncertainty. Meanwhile, the possibility of currency discussions between Kato and Bessent is drawing market attention, as it could influence Japan’s monetary policy and yen valuation moving forward.

“Japan Denies Currency Manipulation Ahead of Key US Talks” “Japan Denies Currency Manipulation Ahead of Key US Talks” “Japan Denies Currency Manipulation Ahead of Key US Talks” “Japan Denies Currency Manipulation Ahead of Key US Talks”