Japan, U.S. finance chiefs share concern over 'undervalued yen'

Japanese Finance Minister Satsuki Katayama said Friday that she and U.S. Treasury Secretary Scott Bessent held online discussions in which both sides voiced concern about the yen's weakness, describing the currency as undervalued.

Bessent said on social media after the call that the two officials talked about the case for a stronger yen, one that would better match the strength of Japan's underlying economy, according to Japan Today.

Speaking to reporters, Katayama said the currency market may have misread the situation recently, though she did not offer specifics. She said the two sides agreed that an undervalued yen remains a problem, discussed broader developments in financial markets, and confirmed plans to deepen cooperation between Tokyo and Washington.

The remarks come as concern mounts over Japan's fiscal position, with some observers warning that strained public finances could put further downward pressure on the currency, per Japan Today.

Following reports of Katayama's comments, the dollar slipped briefly to the upper 156-yen range, fueled by speculation that Japan and the United States could again step into the currency market together. By Friday morning in Tokyo, the dollar had climbed back to the upper 158-yen zone, Japan Today reported.

Katayama also said the market misunderstanding had since been cleared up, suggesting this would help correct what she characterized as an excessive decline in the yen's value.

Earlier that day, Japanese Prime Minister Sanae Takaichi said President Donald Trump had raised concerns about the yen's weakness during their meeting Tuesday in New York, held on the sidelines of the U.N. General Assembly, telling her it was hurting American trade, according to Japan Today.

The exchange between Katayama and Bessent follows a period of sharp yen depreciation earlier this year, when the currency fell to around 164 per dollar, its weakest level in roughly four decades. That slide prompted Japanese and U.S. authorities to carry out a coordinated yen-buying intervention during New York trading hours on July 31 — their first joint move in the currency market in 15 years, Japan Today reported.

Bessent has previously pressed Japanese officials to take action to support the yen, citing worries that continued weakness could stoke inflation in Japan and that rising yields on Japanese government bonds could, in turn, push up yields on U.S. Treasuries.

In his social media post, Bessent said he and Katayama also discussed the need to maintain close communication on currency market developments going forward.