Trump raised weak yen in talks with Takaichi, Japan finance minister says

U.S. President Donald Trump raised concerns about the yen's weakness during a meeting with Japanese Prime Minister Sanae Takaichi, according to Japanese Finance Minister Satsuki Katayama. The two leaders discussed the matter during a recent encounter at the United Nations headquarters in New York. Takaichi informed Trump that, generally speaking, an undervalued yen is a problem, as reported by Katayama at a press conference.

This disclosure is uncommon, as comments from Japanese and U.S. leaders regarding currency movements are typically kept confidential. The yen has remained under pressure against the U.S. dollar since strengthening earlier this month following a Bank of Japan rate cut, which has been interpreted as a potential sign of currency intervention.

Katayama stated that Japan and the United States will continue to maintain close communication. The significant interest rate disparity between Japan and the United States remains a primary reason for the yen's weakness against the dollar. Additionally, the Japanese currency has faced selling pressure due to worries that Japan's fiscal situation may deteriorate further as Takaichi pursues expansive fiscal spending, despite uncertainties about its funding.

Following the yen's trading near its lowest level in over 39 years at around 164 against the dollar, Japanese and U.S. authorities conducted a joint yen-buying intervention in New York trading hours on July 31, marking the first coordinated action in 15 years. U.S. Treasury Secretary Scott Bessent has urged Japan to take measures to strengthen the yen, citing concerns that a weaker yen could exacerbate inflation in Japan and that escalating Japanese government bond yields could elevate U.S. Treasury yields.

As of Friday, the dollar was trading in the lower 158 yen range in Tokyo, after reaching a three-week high of 159.03 yen overnight in New York.