Bessent Calls Excess Forex Volatility Undesirable

Washington, Jan. 14 (Jiji Press)–U.S. Treasury Secretary Scott Bessent at a recent meeting with Japan’s finance chief noted that excess volatility in foreign exchange rates is undesirable, the Treasury Department said Wednesday. Bessent noted “the inherent undesirability of excess exchange rate volatility” at the meeting, the department said, adding that the secretary “also emphasized the need for sound formulation and communication of monetary policy.” The meeting between Bessent and Japanese Finance Minister Satsuki Katayama took place in Washington on Monday on the sidelines of a Group of Seven finance ministers meeting on measures to ensure stable supplies of critical minerals. The yen has been weakening against the dollar following media reports that Japan’s Prime Minister Sanae Takaichi is considering dissolving the House of Representatives, the all-important lower chamber of Japanese parliament, for a snap general election. At the meeting with Katayama, Bessent also expressed his “strong confidence” in the U.S.-Japan alliance, according to the department. Katayama told reporters at the prime minister’s office in Tokyo on Wednesday that Japan is ready to “take appropriate actions against excessive (exchange rate) moves without excluding any options,” referring to the weakening of the Japanese currency. She said she conveyed the stance to Takaichi at a meeting with the prime minister earlier in the day. “(The recent) rapid exchange rate moves are not related to economic fundamentals at all,” Katayama told reporters. “I’m concerned about the developments, which are extremely regrettable,” she added. At the Washington meeting with Bessent on Monday, Katayama said that she is very concerned about the yen’s one-sided declines. She later told reporters that she and Bessent shared their concerns. END [Copyright The Jiji Press, Ltd.]