Japan's finance minister Shunichi Kato said on Friday that the major hold of the US treasury was among the tools available for Tokyo in trade negotiations in the United States, each Reuters.
Kato added that he did not disclose to us the target and framework of the foreign exchange (FX) to control the fx moves.
Basic quotes
Not discussed at the US FX target, plot to control the moves FX.
Discussed with us the need for constructive FX discussion.
There is no discussion of any of us where FX levels should be.
We have confirmed during the earlier assembly in bessent FX moves should be set by markets, excessive FX volatility that is not desirable.
Japan does not manipulate the yen, it should be explained thoroughly to us.
Japan's massive handling of tools it can use in US trade negotiations in the US, then added if Japan has that card is a different question.
It was noted that while Japan's main reason for handling a huge reserve was to maintain enough liquidity for possible Japanese Yen intervention “We clearly need to put all the cards on the table in negotiations. It can be among these cards.”
If we really use that card, however, is a different question.
Market reaction
At the time of writing, the USD/JPY pair traded 0.07% less during the day to trade at 145.30.
Japanese yen faqs
Japanese Yen (JPY) is one of the most traded currencies in the world. Its value is widely determined by the Japanese economic performance, but more specifically in the Bank of Japan policy, the difference between Japanese and US bond yields, or at risk of entrepreneurs, among other factors.
One of the Bank of Japan's mandates is money control, so its motions are key for yen. The BOJ directly intervenes in the currency markets sometimes, generally lowering the cost of the yen, though it is not prevented from doing so often because of political concerns of major trading partners. The BoJ Ultra-Lose financial policy between 2013 and 2024 has caused the yen to remove the major currency due to an increase in policy variation between Bank of Japan and other major banks. Most recently, the gradual disobedience to this ultra-loose policy has provided some yen support.
In the past decade, the BOJ's stance that clings to ultra-loose financial policy has led to an expansion of policy variation on other central banks, especially in the US Federal Reserve. It supports an expansion of diversity between the 10-year US and Japanese bond, favored the US dollar against the Japanese Yen. The BOJ's decision in 2024 to gradually renounce the ultra-loose policy, in conjunction with reductions in interest rates on other major central banks, narrowed the diversity.
Japanese Yen is often seen as a safe investment. This means that in times of stress on the market, investors are more likely to put their money on Japanese money because of the supposed reliability and stability. The chaotic times are likely to strengthen the amount of yen against other currencies that are seen as more risk to invest.
