Trump Warns of Weak Yen, Japan-US Coordination Intensifies

US President Donald Trump expressed concern over the yen's weakness during a recent summit with Japanese Prime Minister Sanae Takaichi, according to Finance Minister Satsuki Katayama. The discussion on foreign exchange reaffirmed the shared US-Japan stance behind their July 31 coordinated intervention.

Katayama said at a regular news conference that Trump voiced his concern about the yen's weakness during their meeting in New York on Tuesday. Takaichi later confirmed Trump's comments, stating that he expressed concerns about the weak yen creating difficulties for trade.

The yen has been sliding despite joint intervention by Tokyo and Washington in July, driven by strong US economic data, a hawkish Federal Reserve, and surging US bond yields. The dollar has been rallying against major currencies, with the yen strengthening slightly after Katayama's remarks to around 158 per dollar.

Treasury Secretary Scott Bessent will continue to communicate closely with Katayama on foreign exchange matters following their discussion at the summit. Japan's policymakers are concerned about the weak yen driving up energy import costs and fueling inflation worries, while the US is worried that a selloff in Japanese bonds could spill over into the Treasury market.

Minoru Kiuchi, minister in charge of economic revitalisation, said the phase of Abenomics-style reflation policies was over, responding to comments from Bessent who suggested Japan's priority should be fighting inflation rather than stimulating growth.