Trump Warns Takaichi of Yen Weakness Threatening US Trade
US President Donald Trump expressed concern to Japanese Prime Minister Sanae Takaichi at their recent summit that a weaker yen is hurting US trade. This comes as the yen remains under pressure against the dollar after strengthening earlier this month following a Bank of Japan rate check.
Takaichi and Trump met on Tuesday in New York on the sidelines of the UN General Assembly, where they discussed the yen's downtrend. Japanese Finance Minister Satsuki Katayama confirmed that the two leaders did discuss the issue, adding that their countries' financial authorities will continue to communicate closely.
The wide interest rate gap between Japan and the US remains a dominant driver of the yen's weakness against the dollar. The Japanese currency has also faced selling pressure on concerns that Japan's fiscal health could worsen further as Takaichi pursues increased spending to spur growth despite uncertainties over how the measures will be funded.
Notably, this is not the first time the two countries have intervened in the foreign exchange market together. In July, they made a joint yen-buying intervention in New York trading hours for the first time in 15 years, after the yen traded around its weakest level in over 39 years at near 164 against the dollar.