Japan finance minister Kato is couching his comments in terms of “FX’ but we all know he is talking about JPY.
Did not discuss with US FX target, framework to control FX movesDiscussed with US need for constructive discussion on FXNo discussion whatsoever with US on where FX levels should beConfirmed with US during earlier meeting with Bessent FX moves should be set by markets, excessive FX volatility undesirableJapan is not manipulating yen, must explain this thoroughly to USsays Japan’s huge US Treasury holdings among tools it can wield in trade negotiations with the US, then adds whether Japan wields that card is a different question
That last comment is a bit wild … a veiled threat … this could get ugly.
More:
It’s true Japan holds huge U.S. Treasury as part of FX reserves, though that is aimed at having enough funds to conduct FX intervention when neededIt’s difficult to say, when asked whether he discussed Japan’s huge US Treasury holdings in meeting with Bessent in Washington
USD/JPY surged with the double impact of a recovering USD and a post-BoJ dropping yen:
This article was written by Eamonn Sheridan at www.forexlive.com.