US Treasury Stresses "Sound Monetary Policy" to Japan... Japanese Government Makes Verbal Yen Intervention

"Unlike in August, when he criticized rate hikes as 'too slow,'
this time he used more restrained language
Japanese stock market rally attributed to 'Sanaenomics'"

Scott Besent, U.S. Secretary of the Treasury. Photo by Reuters Yonhap News

Scott Besant, the U.S. Secretary of the Treasury, who is accompanying President Donald Trump on his tour of Asia, emphasized the importance of "sound monetary policy formulation" during a meeting with Japan's new Finance Minister on the 27th. Unlike in August, when he openly criticized the Bank of Japan for not raising policy rates quickly enough, this time he was noted for using relatively restrained language.

On the 28th, the U.S. Treasury Department released a statement saying, "Secretary Besant expressed strong confidence in the U.S.-Japan alliance and shared his belief that both countries have opportunities for positive engagement in the coming months."

During discussions with Satsuki Katayama, the new Finance Minister, Secretary Besant reportedly highlighted how the circumstances have changed over the 12 years since the introduction of "Abenomics," the economic policy of the late former Prime Minister Shinzo Abe.

Sanae Takaichi, Japan's new Prime Minister, who has earned the nickname "female Abe," is pursuing "Sanaenomics," a policy that continues the principles of Abenomics. Katayama, the first female Finance Minister, is also known as a proponent of expansionary fiscal policy.

The U.S. Treasury stated, "Secretary Besant pointed out that economic conditions have changed significantly since the introduction of Abenomics 12 years ago," and added, "He emphasized the importance of sound monetary policy formulation and communication to stabilize inflation expectations and prevent excessive volatility in exchange rates."

Secretary Besant was also reported to have highly praised Minister Katayama's achievements in regulatory reform during her previous cabinet roles. He expressed confidence that Minister Katayama could lead improvements in Japan's economic productivity.

Reuters noted that Secretary Besant's remarks came ahead of the Bank of Japan's two-day policy meeting, which concludes on the 30th. The market expects the Bank of Japan to hold off on raising interest rates.

Previously, Minister Katayama told reporters late the previous night that Secretary Besant had said "Sanaenomics," which carries on the spirit of Abenomics, is working well and sending very positive signals, while mentioning the record rally in the Japanese stock market.

However, she also stated that she did not discuss the Bank of Japan's monetary policy directly with Secretary Besant. She added that there were no specific discussions on the details of the U.S.-Japan joint foreign exchange statement signed in September.

Bloomberg pointed out that while Secretary Besant had directly suggested the need for a rate hike in August, criticizing the Bank of Japan for "not keeping up with the market" in its response to inflation, this time he adopted a more restrained tone.

Meanwhile, Minoru Kiuchi, Japan's Minister for Economic Revitalization, made a verbal intervention on the 28th, emphasizing the importance of the yen moving stably in line with fundamentals. He stated, "It is important to avoid rapid and short-term foreign exchange fluctuations," and added, "Foreign exchange movements are determined by various factors. We will closely examine the impact of exchange rate fluctuations on the Japanese economy."

This content was produced with the assistance of AI translation services.