Japan says Trump voiced concern over weak yen in summit with PM Takaichi

President Donald Trump raised concern about yen weakness during a summit with Japanese Prime Minister Sanae Takaichi, Japan’s Finance Minister Satsuki Katayama said, offering an unusually detailed account of the leaders’ talks on currencies.

“At the recent Japan-US summit meeting, President Trump expressed concern about the yen’s weakness,” Katayama said at a regular news conference, adding that she was disclosing the exchange for the first time after consulting with the Prime Minister’s Office.

“Prime Minister Takaichi told him, as a general principle, that an undervalued yen is problematic,” Katayama said.

Katayama’s unusually frank account of leaders’ talks, which governments typically keep confidential, points to shared concern in Tokyo and Washington over the yen’s continued slide despite their joint intervention in July.

Takaichi met Trump in New York on Tuesday on the sidelines of the UN General Assembly. She later told reporters they had a “timely” discussion about China ahead of Trump’s planned summit with Chinese President Xi Jinping.

Katayama said the leaders’ discussion on foreign exchange reaffirmed the shared US-Japan stance behind their July 31 coordinated intervention, including a commitment to counter excessive volatility and disorderly moves in the yen.

“In light of this summit meeting, Treasury Secretary (Scott) Bessent and I will continue to communicate closely on a range of matters, including foreign exchange,” she said.

The dollar has been rallying against the yen and other major currencies, driven by strong US economic data, a hawkish Federal Reserve and surging US bond yields.

The yen strengthened slightly after Katayama’s remarks, rising from 158.60 per dollar to trade at around 158.

The weak yen is driving up energy import costs that are already elevated due to the US-Israeli war on Iran, fueling concerns about an inflation overshoot, a headache for Japanese policymakers and for the US, which is worried that a selloff in Japanese bonds could spill over into the Treasury market.

Katayama declined to comment on whether global rises in government bond yields were discussed at the Japan-US summit.

The benchmark 10-year Japanese government bond yield jumped to a 30-year high of 3.115% on Friday following a steep selloff in the US market.

At a separate news conference, Minoru Kiuchi, the minister in charge of economic revitalization and an ally of Takaichi’s reflationist camp, said the phase of Abenomics-style reflation policies, with monetary easing and agile fiscal spending, is over.

Kiuchi’s remarks appeared to respond to comments from Bessent, who recently suggested that Japan’s priority should be fighting inflation rather than stimulating growth, signaling concern about what he sees as lingering elements of Abenomics in Takaichi’s policies and among her political allies.

Hirofumi Suzuki, chief FX strategist at Sumitomo Mitsui Banking Corp, said remarks by both Katayama and Kiuchi reflected a heightened sense of concern over the yen’s weakness, particularly after Tokyo conducted rate checks on Friday, a move that is often viewed as a precursor to currency intervention.