Didn’t Discuss FX Levels, Framework with US Counterpart Treasury Sec Bessent — TradingView News #JapanFinance

–BOJ Governor Ueda: To Hike Interest Rates Gradually If Outlook for 2% inflation Sets in

(MaceNews) – Japanese Finance Minister Katsunobu Kato told a news conference on Thursday in Washington that he and his U.S. counterpart didn’t discuss guiding the currency market toward a weaker dollar against yen to help trim the U.S. trade deficit and boost its export competitiveness, as speculated by some market participants.

Some of President Trump’s advisers have argued for weakening the dollar to boost US exports. Some analysts say the U.S. administration is considering this approach. No Group of Seven country has intentionally depreciated its currency to gain trade advantage in decades. Policy-makers generally agree market forces are too strong for governments to manipulate currencies for long.

“There was no talk from the U.S. side about exchange rate levels, targets, or a framework for managing the exchange rate,” he told reporters after holding a 50-minute meeting with Treasury Secretary Scott Bessent on the sidelines of a routine gathering of financial policymakers from the Group of 20 industrialized and developing economies.

The two sides reaffirmed that exchange rates should be determined in the market and that excessive volatility and disorderly movements have a negative impact on economic and financial stability, Kato said.

Bank of Japan Governor Kazuo Ueda told the same news conference that the bank is on course toward normalizing its monetary policy stance further after a decade of large-scale cash injections aimed at turning around stubborn deflation that had been in place until he took office about two years ago.

“If the outlook for the underlying inflation rate settling toward 2% is realized, we will raise interest rates and adjust the degree of monetary easing accordingly,” he said. Ueda and Kato are in Washington this week to attend the spring meetings of the G20 and the World Bank/International Monetary Fund group.

Ueda said he will “monitor data carefully without any presumptions” to ensure that the underlying measure of inflation “converges” around the bank’s 2% target amid high uncertainty over a global trade war initiated by President Trump.

Ueda declined direct comment on recent remarks by President Trump that he could fire Federal Reserve Chair Jerome Powell for not cutting rates swiftly but said, “Generally speaking, central bank independence (of political influences) is a very important factor in stabilizing the economy and finances.”

The governor said he wants to “focus on conducting appropriate monetary policy toward our goal of achieving the 2% inflation target in a sustainable and stable manner.”

At its next meeting on April 30-May 1, the BOJ’s nine-member board is expected to remain cautious amid high uncertainty over a global trade war that has already hurt sentiment among large manufacturers, after having decided unanimously to maintain the target for overnight interest rate at 0.5% in March.

Previously, the panel voted 8 to 1 to raise the policy rate by another 25 basis points to 0.5% in January in a third rate hike during the current normalization process that began in March 2024. Members are closely monitoring whether high wage increases by major firms will spread to smaller firms in fiscal 2025 that began on April 1 at a time when real wages are falling, which could hurt consumption further and generate deflationary pressures.