The financial authorities of Japan and the United States continue to protect the yen by strengthening exchange rate coordination

The U.S. and Japanese fiscal authorities once again reaffirmed their cooperation approach in responding to the yen-to-U.S. dollar exchange rate. The yen-protective measures Japan has taken in recent days are likely to continue being advanced within the framework of international cooperation for some time.

On the 12th, U.S. Treasury Secretary Scott Bessent, who is visiting Japan, met with Japan’s Finance Minister Katsunobu Kato to discuss economic issues, including the exchange rate. After the meeting, Finance Minister Kato said at a press conference that, regarding the yen-to-U.S. dollar exchange rate, both sides have decided to continue practical cooperation going forward, and confirmed that the U.S. side has a full understanding of this. Since the exchange rate is a variable that directly affects the prices of imports and exports between the two countries, capital flows, and prices, information coordination between the fiscal authorities is itself an important signal for the market.

Japanese media interpreted the outcome of the talks as the United States, in effect, showing understanding of Japan’s intervention in the foreign exchange market. The Nihon Keizai Shimbun reported that the U.S. government seems to be tolerating market intervention actions taken by the Japanese government in response to yen depreciation. Usually, the United States is sensitive to the manipulation of exchange rates by artificial means, but when recent yen depreciation has been exacerbated too much, Japan has had to step up its response to prevent import prices from rising and to ease the burden on households. Finance Minister Kato also explained that the two countries are cooperating well regarding the current exchange-rate trend.

Apart from the exchange-rate issue, the meeting also involved economic security topics. Both sides discussed plans for strengthening international cooperation on supply chains for critical minerals needed for semiconductors and batteries, among other things. In particular, as Finance Minister Kato revealed, Minister Bessent said that China’s export controls on critical minerals are unfair, and the U.S. would continue raising objections on this matter. This scene shows that the U.S.-China conflict has gone beyond a dispute over tariffs alone and has spread to competition over raw materials for high-tech industries.

Financial security issues related to artificial intelligence were also put on the agenda. The two sides exchanged views on concerns about the security of the financial system triggered by Anthropic’s latest AI model, Claude Mitos. The financial system is a structure in which payments, fund transfers, and market transactions are interconnected in real time. As new AI technologies are applied more widely, convenience increases; but at the same time, it becomes even more important to check for operational mistakes and security vulnerabilities. Finance Minister Kato explained that the U.S. government is sharing relevant developments and moving toward a direction of joint action.

This meeting shows that U.S.-Japan cooperation has gone beyond yen defensive measures and expanded into the areas of supply chains and financial security. In particular, if yen depreciation intensifies again, the likelihood of Japan intervening in the market will continue to be mentioned, and in the process, the U.S. stance will become a key variable that determines market fluctuations. At the same time, issues related to critical minerals and AI security are likely to become new pillars of economic cooperation between the two countries in the future.