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 moves
- Discussed with US need for constructive discussion on FX
- No discussion whatsoever with US on where FX levels should be
- Confirmed with US during earlier meeting with Bessent FX moves should be set by markets, excessive FX volatility undesirable
- Japan is not manipulating yen, must explain this thoroughly to US
- says 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 needed
- It’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:
