Japan's Finance Minister Touts 'Smooth' Relations with Bank of Japan

Japan's Finance Minister Satsuki Katayama has downplayed concerns about her government's relationship with the Bank of Japan, describing it as 'normal and smooth'.

Katayama made these comments in a Reuters interview, where she also touched on the government's plans for fiscal policy. She noted that the administration will soon start compiling the 2027 budget and emphasized the need to engage with the bond market throughout the process.

Katayama acknowledged that some investors had been concerned about potential encroachment on monetary policy after a draft of Prime Minister Sanae Takaichi's economic blueprint was released earlier in July. However, she stressed that the final version of the document includes a footnote citing a legal provision that safeguards the BOJ's independence.

Katayama also commented on the yen's recent declines, stating that a weak currency has both merits and demerits for the economy. When asked about the possibility of joint yen-buying intervention by Japan and the US, she declined to comment but noted that Tokyo recognizes Washington's position on exchange-rate moves.