By Leika Kihara
WASHINGTON (Reuters) -Japan told its G7 counterparts that policymakers must be vigilant against excessively volatile and disorderly moves in the currency market, Finance Minister Katsunobu Kato said on Wednesday.
Kato also said he confirmed with U.S. Treasury Secretary Scott Bessent an agreement made last month on exchange-rate policy during bilateral talks, held on the sidelines of the G7 and G20 finance leaders’ gathering in Washington.
“We’ve seen some rapid yen falls last week. It’s desirable for exchange rates to move stably. We are vigilant to any excessive volatility in the currency market,” Kato told reporters.
The yen has whipsawed in recent days due in part to Japan’s political uncertainty, as new ruling party leader Sanae Takaichi’s bid to become the country’s first female prime minister was thrown into doubt when her ruling party’s junior coalition partner quit.
Kato said he would not comment on what was driving recent exchange-rate moves, when asked how Japan’s political turmoil was affecting yen moves, but said in general political stability was desirable.
In a joint statement issued last month, Japan and the U.S. reaffirmed their commitment to “market determined” currency rates, while agreeing that foreign exchange interventions should be reserved for combating excess volatility.
A weak yen has become a political pain point for Japanese policymakers as it inflates the cost of living for households by boosting import prices for raw material and fuel.
(Reporting by Leika Kihara; Editing by Jacqueline Wong and Sam Holmes)
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