Japan's Finance Minister Satsuki Katayama issued a warning to market speculators that Japan is ready to re-enter the foreign exchange market to intervene if necessary. This came after the latest US inflation data exceeded expectations, driving the yen to a stage low against the US dollar this month.
She also stated that since the US and Japan jointly acted to support the yen in July this year, the positions of Tokyo and Washington on exchange rate issues have not changed.
Speaking to reporters on Thursday morning before attending the G20 meeting in Bangkok, Katayama said: "Our stance on foreign exchange is completely consistent with the signal conveyed when the two countries conducted joint intervention. The US side is currently aligned with our position, and we will not hesitate to act if necessary."
Katayama's remarks came against the backdrop of US CPI data released on Wednesday showing the highest inflation level in five months, dragging the yen further weaker. That day, the yen fell to 158.95 per US dollar at one point, then narrowed its losses as US Treasury yields retreated.
During this trip, Katayama will attend a series of international financial meetings. Finance ministers and central bank governors from participating countries are expected to discuss multiple global issues, including rising global bond yields and financial risks brought by frontier artificial intelligence (AI).
Regarding the recent surge in global bond yields, Katayama pointed out that among major developed economies, Japan is one of the few countries that can convincingly argue for fiscal sustainability. She emphasized that Prime Minister Sanae Takaichi and her cabinet have repeatedly made clear commitments to steadily reduce the debt-to-GDP ratio and keep government bond issuance within a reasonable range.
"Not all countries can make such clear commitments like us," Katayama said. "We can openly articulate our fiscal responsibility, and I hope to firmly convey this signal."
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