Japan's Finance Minister Plans Forex Discussions with U.S. Counterpart at G7

Japan's Finance Minister Katsunobu Kato has expressed intentions to meet with U.S. Treasury Secretary Scott Bessent during the upcoming G7 meetings scheduled in Canada from May 20 to 22. This discussion aims to address foreign exchange matters, reflecting ongoing economic dialogues between the two nations.

During a press conference, Kato confirmed his attendance at the G7 gathering, which will include finance leaders and central bank governors from the world's seven largest economies. He indicated that he hopes to engage Bessent in discussions about currency fluctuations, considering the complex relationship between currency rates and trade negotiations.

Japan and the United States have recently agreed to separate discussions on currency values from their direct trade negotiations, opting instead to handle these issues through conversations between their finance ministers. Kato noted that if the meeting with Bessent materializes, it could also touch upon Japan's tariff discussions with the U.S.

The last meeting between Kato and Bessent took place on April 24 in Washington, D.C., where both officials committed to maintaining a constructive dialogue regarding currency policies. However, there was no agreement on setting specific currency targets or establishing a framework to manage fluctuations of the yen.

Concerns have arisen in the market regarding U.S. President Donald Trump's focus on the trade deficit and his previous criticisms about Japan's weaker yen, which has sparked speculation that Japan may face pressure to strengthen its currency against the dollar. Recently, the dollar experienced a surge following an agreement between the United States and China to temporarily reduce reciprocal tariffs, alleviating immediate fears of a trade war that could negatively impact the global economy.

In light of these developments, Kato emphasized the importance of closely monitoring the impact of the U.S.-China agreement on the Japanese economy and the currency market. He stated that the government will review related developments thoroughly and respond appropriately while refraining from commenting on specific currency movements.