Japan’s Kato hints at plans to speak with US Treasury Secretary Scott Bessent on FX this week

Japan’s Finance Minister Shunichi Kato said on Tuesday that he expects any talks with US Treasury Secretary Scott Bessent this week to be based on this understanding of foreign exchange.

Key quotes

Will hold bilateral meetings with counterparts at the G7 finance leaders’ meeting later this week.
Expect to discuss various topics, including FX, if I were to meet Bessent on sidelines of G7 gathering.
Will scrutinise the impact of U.S. fiscal, monetary policy on Japan’s economy, when asked about Moody’s downgrade of US debt rating.
In previous bilateral meeting with Bessent, two sides confirmed FX rates should be set by markets and that excess volatility in FX market has adverse impact on economy.
Expect any talks with Bessent this week to be based on this understanding of FX.

Market reaction

At the time of writing, the USD/JPY pair is trading 0.08% lower on the day to trade at 144.75.