“We confirmed that currency rates should be determined by the market, and that excessive volatility can harm the economy and financial stability,” Kato said Friday at a post-cabinet meeting press conference, referring to his April bilateral meeting with the US Treasury secretary in Washington. “I’m looking for a chance to speak with Bessent again next week to discuss these points, if the circumstances allow,” Kato added.
Kato plans to attend the Group of Seven finance ministers’ meeting in Canada next week, where he aims to hold further discussions with Bessent.
Kato’s remarks follow a report that the US and South Korea discussed currency issues during trade talks earlier this month. News of that development prompted gains of more than 1% in several Asian currencies, including the won and yen.
According to the report, South Korea’s Deputy Finance Minister Choi Ji-young and Robert Kaproth, who is currently performing the duties of assistant US Treasury secretary for international finance, discussed FX policy during a May 5 meeting in Milan and intend to continue that dialogue. Investors interpreted the talks as further evidence that the Trump administration favors a weaker US dollar and that foreign governments may tolerate stronger currencies to facilitate trade agreements with the US.
Currency policy remains a focal point for markets amid the ongoing US trade negotiations. A person familiar with the matter said US officials involved in global trade talks aren’t pursuing currency commitments in the deals.
Kato declined to comment on the discussions between Washington and Seoul, saying only that the market’s reaction reflected its own interpretation of the news. Japan’s chief negotiator Ryosei Akazawa is expected to return to the US for a third round of trade talks later this month, reportedly once the G-7 meeting has concluded.
As of mid-morning in Tokyo Friday, the yen was trading around 145 per dollar, paring overnight gains after Japan reported weaker-than-expected GDP figures for the first quarter.
