Japan's Kato eyes FX talks with US Treasury amid trade tensions

Japanese Finance Minister Katsunobu Kato said he plans to discuss foreign exchange matters with US Treasury Secretary Scott Bessent, emphasising that excessive currency volatility is undesirable. Speaking to parliament, Kato reaffirmed the April 24 agreement that exchange rates should be market-determined and that volatility harms economic and financial stability. The two are expected to meet on the sidelines of the G7 finance ministers’ meetings in Canada later this month. Amid heightened US pressure over Japan’s weak yen and trade deficit concerns, both countries agreed to keep currency issues separate from direct trade talks. Kato also addressed Japan’s US Treasury holdings, noting the government’s focus on optimal asset management and liquidity. Opposition leaders have suggested reinvesting proceeds into super-long bonds as leverage in tariff negotiations.