Japan and US Coordinate to Support Weakening Yen

The Government of Japan and the United States are coordinating closely to address the continued weakness of the Japanese yen, which recently declined to approximately 158.4 per dollar. The currency's slide follows strong U.S. private-sector data that increased expectations for further interest rate hikes by the Federal Reserve System, offsetting a September 18 decision by the Bank of Japan to raise rates to 1.25%, the highest level since 1995.

During a summit in New York, President Donald Trump expressed concern over the yen's weakness. Prime Minister Sanae Takaichi informed Trump that an undervalued yen is problematic as a general principle. Following these talks, Finance Minister Satsuki Katayama confirmed that the principles guiding the coordinated currency intervention between Japan and the U.S. in July remain active, signaling Tokyo's readiness to counter disorderly market movements.

To support the currency, Japan spent a record 15.4 trillion last month and reportedly conducted rate checks in overseas markets last Friday. While these checks typically precede direct intervention, the resulting strengthening of the yen was temporary, and the exchange rate remained near 158.40 following Katayama's latest remarks.