Japan’s Finance Minister Shunichi Kato said on Tuesday that any discussions with US Treasury Secretary Scott Bessent during this week’s G7 finance leaders’ meeting are expected to follow the previously agreed understanding on foreign exchange (FX) matters.
Kato noted that bilateral meetings with counterparts, including Bessent, will cover various topics with FX likely on the agenda. He emphasized the importance of monitoring the impact of US fiscal and monetary policies on Japan’s economy, especially in light of Moody’s recent downgrade of US debt.
In their previous meeting, Kato and Bessent reaffirmed that FX rates should be determined by market forces, warning that excessive volatility in FX markets harms economic stability. He expects that this principle will guide any upcoming talks.
Market Reaction:
USD/JPY dipped slightly by 0.08%, trading near 144.75 at the time of the statement.
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