By Makiko Yamazaki and Leika Kihara
TOKYO, May 12 (Reuters) – The United States and Japan maintain “constant and robust” coordination in tackling undesirable, excessively volatilite currency moves, U.S. Treasury Secretary Scott Bessent said on Tuesday after meeting his Japanese counterpart in Tokyo.
The remarks suggest Washington broadly consents to Japan’s recent round of yen-buying intervention aimed at propping up its sagging currency, which is inflicting pain on the economy by pushing up import costs.
“I was pleased to reaffirm the strong economic partnership between the United States and Japan,” Bessent said on X.
The comments came just hours after Japanese Finance Minister Satsuki Katayama told reporters the two had reaffirmed close efforts in tackling exchange rate moves, including currency intervention.
“The level of communication and coordination between our teams in addressing undesirable, excess volatility in currency markets continues to be constant and robust,” Bessent added.
JAPAN’S RESPONSE TO CURRENCY MOVES IN LINE WITH U.S. PACT
Katayama said she confirmed with Bessent that Japan was responding to currency moves in line with a joint statement signed with the U.S. last September that allowed for foreign exchange intervention to combat excessive market volatility.
“We agreed that we are coordinating extremely well on recent market moves, including exchange rates,” Katayama told a news conference in remarks that saw the yen weaken slightly, falling past 157.50 to the dollar.
“Given current circumstances, we strongly confirmed anew the need to continue coordinating closely on market moves,” she said when asked whether Bessent had commented on recent suspected currency intervention by Japan to support the yen.
“We engaged in discussions on deepening our coordination on various fronts,” Katayama added, in response to a query whether “close coordination” meant that Washington could take the initiative in tackling sharp falls in the yen.
She declined to comment when asked if the Bank of Japan’s monetary policy was discussed.
NO STRONG WARNING AGAINST YEN WEAKNESS
Katayama emphasised coordination, but delivered no strong warning against yen weakness in a disappointment for markets, said Akira Moroga, chief market strategist at Aozora Bank.
“The biggest point to watch is what kind of messages Bessent will put out going forward,” he added.
Japanese policymakers are wagering an endorsement from Bessent on their foray into the currency market could give their intervention some extra bite and help slow the yen’s slide.
Some analysts have also speculated that Bessent might renew his calls for speedier BOJ rate hikes as a way to support the yen.
Japan has also flagged the possibility of stepping into oil futures markets as it sees speculative surges in energy prices as a major driver of the yen’s weakness against the dollar, but Katayama clarified on Tuesday it had taken no such step yet.
With the war-induced oil price spike intensifying price pressures, some BOJ policymakers argued in April that rates may need to rise soon, with one flagging the chance of a June move, a summary of opinions at last month’s meeting showed.
Bessent also met Ryosei Akazawa, Japan’s minister for economy, trade and industry and agreed to strengthen ties in the fields of energy and critical minerals.
He is expected to meet Prime Minister Sanae Takaichi before his three-day visit to Tokyo wraps up on Wednesday.
($1=157.5200 yen)
(Reporting by Makiko Yamazaki and Leika Kihara; Additional reporting by Satoshi Sugiyama, Takaya Yamaguchi and Yoshifumi Takemoto; Editing by Jacqueline Wong, John Mair and Clarence Fernandez)
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