logo
US, Japan finance chiefs agree current dollar-yen reflects fundamentals

US, Japan finance chiefs agree current dollar-yen reflects fundamentals

CNA22-05-2025

BANFF, Alberta :U.S. Treasury Secretary Scott Bessent and Japanese Finance Minister Katsunobu Kato agreed on Wednesday that the dollar-yen exchange rate currently reflects fundamentals, the U.S. Treasury Department said, a rare and explicit statement on the market situation.
President Donald Trump's focus on addressing the huge U.S. trade deficit and his past remarks accusing Japan of intentionally maintaining a weak yen have led to market expectations that Tokyo will face pressure to strengthen its currency's value against the dollar to give U.S. manufacturers a competitive advantage.
"They reaffirmed their shared belief that exchange rates should be market determined and that, at present, the dollar-yen exchange rate reflects fundamentals," the Treasury Department said in a statement.
Bessent and Kato met on the sidelines of the Group of Seven finance ministers gathering in Banff, Canada.
Asked about the Treasury's claim that the two agreed exchange rates reflect fundamentals at a subsequent news conference, Kato said that he was not in a position to comment but added that he did not discuss 'exchange-rate levels'.
"We agreed that currency rates should be set by markets," he said.
The Treasury Department also said in the statement that, as in their previous meeting in April, they did not discuss foreign exchange levels.
The dollar briefly jumped to 144.40 yen after the U.S. statement, but the lack of clear confirmation from the Japanese side pushed back the greenback below 143.50 yen.
Japan and the United States have agreed to keep the thorny issue of currency rates separate from direct trade negotiations, setting it aside for talks between their finance ministers.
A weak yen has also been a headache for Japanese policymakers because it accelerates inflation by pushing up import costs and weighs on consumption.
But the yen has already strengthened about 9 per cent this year, as strong uncertainties stemming from sweeping U.S. tariffs have led investors to buy safe-haven currencies such as the yen.
In the news conference, Kato said he did not directly discuss Japan's massive holdings of U.S. Treasuries with Bessent.

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

After 3 up days, S&P 500 falls on trade announcement
After 3 up days, S&P 500 falls on trade announcement

Straits Times

time39 minutes ago

  • Straits Times

After 3 up days, S&P 500 falls on trade announcement

Traders working on the floor of the New York Stock Exchange, in New York City, on June 11. PHOTO: REUTERS After 3 up days, S&P 500 falls on trade announcement NEW YORK - Wall Street stocks finished lower June 11 despite positive movement in the US-China trade conflict and a benign US inflation report. Following two days of talks in London, top US and Chinese negotiators announced a 'framework' agreement late on June 10 that included Chinese concessions on rare earth materials and Washington allowing Chinese students to study at US universities. But stocks fell in what described as a 'sell the news' response to a breakthrough that had been largely priced in. The broad-based S&P 500, which rose the last three days, finished down 0.3 per cent at 6,022.24. The Dow Jones Industrial Average was flat at 42,865.77, while the tech-rich Nasdaq Composite Index dropped 0.5 per cent to 19,615.88. Treasury Secretary Scott Bessent warned a broader deal with China would take a 'longer process,' saying it was possible to rebalance economic ties with Beijing only if Beijing proved a 'reliable partner in trade negotiations.' And for partners 'negotiating in good faith,' Mr Bessent told a congressional committee, there could be an extended pause before higher threatened tariff rates take effect in July. Besides trade, markets digested key inflation data. Consumer prices rose 2.4 per cent compared with a year ago, up from a 2.3 per cent reading for the prior month, a modest uptick that analysts said still did not fully reflect the impact from Mr Trump's tariffs. Mr Sam Stovall, of CFRA Research, described the June 11 session as a 'rollercoaster,' positing that the negative finale may reflect unease at reports Mr Trump could appoint a 'shadow' Federal Reserve chairman to try to influence monetary policy without firing Fed chairman Jerome Powell. Mr Stovall also highlighted the possibility that 'the market is overbought and due for some sort of digestion of gains.' Among those falling, large tech names including Amazon, Facebook parent Meta and Apple lost more than 1 per cent. AFP Join ST's Telegram channel and get the latest breaking news delivered to you.

US: Stocks rally fades after China trade framework
US: Stocks rally fades after China trade framework

Business Times

time43 minutes ago

  • Business Times

US: Stocks rally fades after China trade framework

[NEW YORK] Wall Street stocks finished lower on Wednesday despite positive movement in the US-China trade conflict and a benign US inflation report. Following two days of talks in London, top US and Chinese negotiators announced a 'framework' agreement late on Tuesday that included Chinese concessions on rare earth materials and Washington allowing Chinese students to study at US universities. But stocks fell in what described as a 'sell the news' response to a breakthrough that had been largely priced in. The broad-based S&P 500, which rose the last three days, finished down 0.3 per cent at 6,022.24. The Dow Jones Industrial Average was flat at 42,865.77, while the tech-rich Nasdaq Composite Index dropped 0.5 per cent to 19,615.88. Treasury Secretary Scott Bessent warned a broader deal with China would take a 'longer process,' saying it was possible to rebalance economic ties with Beijing only if Beijing proved a 'reliable partner in trade negotiations.' BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up And for partners 'negotiating in good faith,' Bessent told a congressional committee, there could be an extended pause before higher threatened tariff rates take effect in July. Besides trade, markets digested key inflation data. Consumer prices rose 2.4 per cent compared with a year ago, up from a 2.3 per cent reading for the prior month, a modest uptick that analysts said still did not fully reflect the impact from Trump's tariffs. Sam Stovall of CFRA Research described Wednesday's session as a 'rollercoaster,' positing that the negative finale may reflect unease at reports Trump could appoint a 'shadow' Federal Reserve Chair to try to influence monetary policy without firing Fed Chair Jerome Powell. Stovall also highlighted the possibility that 'the market is overbought and due for some sort of digestion of gains.' Among those falling, large tech names including Amazon, Facebook parent Meta and Apple lost more than one per cent. AFP

Israel-Hamas war: Countries impose sanctions on 2 far-right Israeli ministers
Israel-Hamas war: Countries impose sanctions on 2 far-right Israeli ministers

CNA

time9 hours ago

  • CNA

Israel-Hamas war: Countries impose sanctions on 2 far-right Israeli ministers

Australia, the UK, Canada, New Zealand and Norway have united to impose sanctions on two Israeli ministers, known for their far-right positions. The group of five western nations has accused Finance Minister Itamar Ben-Gvir and National Security Minister Bezalel Smotrich of repeatedly inciting violence against Palestinians in the West Bank. The countries underlined that their move should not be seen in isolation from events in Gaza. Sanctions include travel bans and the freezing of assets. Trent Murray has more.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store