Overview

• U.S. Treasury Secretary Scott Bessent and Japanese Finance Minister Katsunobu Kato reiterated their stance that exchange rates should be determined by market fundamentals during their meeting at the G7 in Banff, Canada.
• The officials did not discuss specific foreign exchange levels, according to a statement from the U.S. Treasury Department.
• The yen fell as much as 0.5% to ¥144.40 against the dollar following the meeting, making it the weakest performer among G10 currencies.
• Bessent and Kato also addressed broader U.S.-Japan economic ties, including trade negotiations and global security issues, as Japan faces heightened recession risks following a first-quarter economic contraction.
• This marks the second face-to-face meeting between the two officials in a month, underscoring ongoing bilateral coordination on economic and financial matters.