U.S. Sees Excessive Yen Volatility as “Undesirable”

Washington, July 23 (Jiji Press)–Excessive fluctuations in the yen are “undesirable,” the U.S. Treasury Department said in a semiannual report released Thursday. “While global factors such as financial market volatility and oil prices have likely affected the yen, excess volatility in the yen is undesirable,” said the report on macroeconomic and foreign exchange policies of major trading partners of the United States. As it did in the previous report released in January, the department placed 10 economies, including Japan, China and South Korea, which all run trade surpluses with the United States on its foreign exchange policy monitoring list. The latest report said that from the end of 2024 to the end of April 2025, “the yen appreciated by nearly 10 pct against the dollar, before softening and ending the year nearly flat.” Referring to the term “undesirable,” which did not appear in the previous report, a Treasury official said that this was part of a message that the U.S. side had consistently convened over the past year. Despite the Bank of Japan’s gradual interest rate hikes, the Japanese currency “remains near multi-decade lows,” the latest report said. During the 12-month period through December 2025, covered by the report, the Japanese government and the Japanese central bank did not launch a yen-buying, dollar-selling intervention. “Japan is very transparent with respect to foreign exchange operations,” given that the Asian country releases monthly reports on the total value of its foreign exchange interventions if any, the report said. Touching on a Japan-U.S. finance ministers’ joint statement released in September last year that supported currency market intervention to deal with excessive volatility, the report said the department “will continue its close consultations with the Japanese Ministry of Finance on macroeconomic and foreign exchange matters.” The seven other economies placed in the latest monitoring list are Taiwan, Singapore, Thailand, Vietnam, Germany, Ireland and Switzerland. On Beijing, the report said, “China provides very limited transparency regarding both its exchange rate policy tools and the policy objectives of its exchange rate management regime.” The department also said that it is examining broader activities by Chinese state banks that could affect exchange rates. END [Copyright The Jiji Press, Ltd.]