Japan is prepared to intervene against disorderly currency movements and excessive speculation, Finance Minister Satsuki Katayama said on Monday, reaffirming close coordination with the United States ahead of its congressional midterm elections.
Katayama said Tokyo would continue operating under its existing understanding with Washington regardless of the election outcome, maintaining a common commitment to orderly foreign exchange markets while each government pursues its own economic objectives.
“We issued a joint statement together, and we will act in line with that,” she told a regular news conference. “If there are disorderly moves or excessive speculative movements, we will take action.”
Her comments came as investors assessed the implications of Tuesday’s American elections for the dollar, US government bond yields and the yen. The vote will determine control of the House of Representatives and Senate, potentially altering President Donald Trump’s legislative prospects.
Katayama stressed that Japan’s engagement with the US Treasury was continuing and that a change in congressional control would not automatically alter the officials responsible for currency discussions. Treasury Secretary Scott Bessent is her American counterpart.
“We have been in constant talks with them and will continue to do so,” she said, emphasising the importance of preventing disruptive movements rather than defending any particular exchange rate.
The yen traded around 157.8 against the dollar on Monday, remaining under pressure as traders weighed the possibility of renewed official efforts to support the currency. Katayama declined to judge whether the prevailing exchange rate was appropriate or to identify a threshold that might trigger official action.
She said market conditions had improved compared with the period when the Japanese currency weakened beyond 160 per dollar. Nevertheless, the government remained concerned about excessive volatility and transactions driven by speculation.
“I believe there is absolutely no wavering on either side in seeking to prevent excessive volatility, speculative moves and disorderly market developments, while pursuing our respective policy objectives,” Katayama said.
The distinction between exchange rate levels and the speed of currency movements is important for Japan’s intervention policy. Officials have repeatedly avoided committing themselves to a fixed dollar-yen rate, leaving room to respond when trading conditions threaten broader financial stability.
Monday’s remarks did not constitute an announcement of fresh intervention. They instead reiterated that the authorities retain the option of action and intend to consult Washington when necessary to preserve confidence in the functioning of international currency markets. Neither government disclosed a new operation or a revised bilateral arrangement on Monday.
Japan and the United States carried out coordinated yen-buying intervention on 31 July after persistent currency weakness raised concerns about market instability. Subsequent discussions between Katayama and Bessent reaffirmed their intention to discourage disorderly trading and maintain communication between their financial authorities.
At a meeting in North Carolina in August, the two finance chiefs agreed to continue cooperating on orderly currency movements. Katayama subsequently repeated that the policy stance established following their joint market action had not changed.
That understanding provides the immediate context for her latest assurances. It does not mean that every fluctuation in the yen will prompt intervention, or that the two governments necessarily share identical preferences about the currency’s value.
The approaching US elections add uncertainty because shifts in expectations for American fiscal policy can affect Treasury yields and the dollar. A change in the outlook for government borrowing or spending could influence the interest rate differential that helps shape demand for yen-denominated assets.
Such market responses remain contingent on the election result and subsequent policy decisions. Katayama offered no forecast for the vote or specific projection for the yen, concentrating instead on the established mechanism for communication with Washington.
Japan’s authorities also face domestic concerns surrounding the currency. A weaker yen can increase the local cost of imported fuel, food and other goods, complicating efforts to contain household expenses. Exporters, meanwhile, can benefit when overseas earnings are translated into yen, although the effects differ across businesses.
Prime Minister Sanae Takaichi has acknowledged problems associated with an undervalued yen. Katayama referred to shared concerns expressed by Takaichi and Trump during their September discussions, while making clear that maintaining orderly trading remained the operational priority.
The finance minister also addressed fiscal administration on Monday, saying the government would seek greater precision and transparency in its estimates of tax revenue. Her comments on the budget came separately from the currency assurances.
