Takaichi Says Trump Raised Weak Yen Concerns Over U.S. Trade

Key Points

• Japanese Prime Minister Sanae Takaichi said US President Donald Trump raised concerns about the yen’s weakness during their talks in New York last month.
• Takaichi said the US side told her that the weak yen was creating difficulties for American trade.
• She responded that, as a general principle, an undervalued yen is a problem.
• US Treasury Secretary Scott Bessent has repeatedly argued that the Bank of Japan should raise interest rates to help the yen reach an appropriate level.
• Japanese Finance Minister Satsuki Katayama said discussions with Bessent indicated US understanding of Japan’s economic policy.
• Tokyo and Washington have already carried out a joint currency intervention, their first such action in 28 years.
• Japanese officials have continued to maintain that US statements are not determining Japan’s monetary-policy decisions.
• Takaichi said her government would focus on improving Japan’s potential growth rate, strengthening supply capacity and increasing economic competitiveness.
• She linked stronger economic competitiveness with greater international confidence in the yen.
• The renewed currency discussion comes as Japan and the United States remain closely engaged over trade and broader economic relations.

Japan Daily Sun (JDS) October 2, 2026 – Prime Minister Sanae Takaichi has disclosed that US President Donald Trump raised the weakness of the Japanese yen during their recent talks in New York, with the US side saying the currency’s depreciation was creating difficulties for American trade. Takaichi said she responded that an undervalued yen was problematic as a general principle. The comments provide further evidence that the exchange rate has become an important issue in economic discussions between Tokyo and Washington, while Japanese officials continue to say that domestic economic policy is not being dictated by US pressure.

What did Takaichi say about Trump’s concerns over the weak yen?

As reported by Sakura Murakami for The Japan Times, Prime Minister Sanae Takaichi said in an exclusive interview with Nippon Television that the weakness of the yen had been raised during her meeting with Donald Trump in New York.

Takaichi said the US side had explained that American trade was facing difficulties because of the weak Japanese currency. In response, she told the US president that an undervalued yen was problematic as a general principle.

The disclosure is significant because discussions between national leaders over exchange rates are normally handled with considerable discretion. Japan’s Finance Minister Satsuki Katayama had already confirmed in September that Trump had raised the yen’s weakness during his meeting with Takaichi.

Reuters, in a report by Makiko Yamazaki published on September 25, said Katayama described the discussion as an unusually detailed account of the leaders’ exchange on currencies. Katayama said she was making the details public after consulting the Prime Minister’s Office.

The latest comments from Takaichi therefore add to information already disclosed by Japan’s finance minister and show that the issue was not simply a matter of market commentary. The yen’s value has become part of the economic dialogue between the two governments.

Why is the weak yen a concern for the United States?

A weaker yen can alter the relative prices of Japanese and American goods. When the yen loses value against the dollar, Japanese products can become comparatively cheaper for overseas buyers when measured in dollar terms, while American products can become more expensive for Japanese consumers.

The Trump administration has therefore taken an active interest in Japan’s currency position as part of its broader focus on trade balances and the competitiveness of American producers.

The Financial Times reported that Trump expressed concern about the weakening yen during his meeting with Takaichi, linking the currency to trade imbalances and the position of US manufacturers.

The issue also reflects a broader disagreement over how Japan should manage its economy. A weaker currency can support exporters by improving the value of overseas earnings when converted into yen. At the same time, it can increase the domestic cost of imported goods, including energy and other commodities.

For Japan, the policy challenge is therefore not limited to the exchange rate itself. Currency movements affect inflation, household purchasing power, exporters, importers and government economic policy.

What has Scott Bessent said about the Bank of Japan?

US Treasury Secretary Scott Bessent has repeatedly expressed concern about the yen’s level and has indicated that monetary policy should play a role in addressing currency weakness.

According to The Japan Times, Bessent has repeatedly suggested that the Bank of Japan should raise interest rates to help the yen reach an appropriate level. In a speech at a university in Texas, he said he had “pretty good insight” into what Japanese policymakers were preparing to do and challenged market participants to bet against him.

Bessent’s comments have attracted attention because interest-rate differences between the United States and Japan are an important factor affecting currency markets.

The Bank of Japan has been moving away from the prolonged period of exceptionally loose monetary policy that characterised much of the previous decade. However, Japanese policymakers must also consider domestic economic conditions, inflation and the impact of higher borrowing costs.

Japanese officials have generally played down the suggestion that comments from Washington are determining their decisions.

What did Takaichi say about discussions between Katayama and Bessent?

Takaichi also addressed communications between Japanese Finance Minister Satsuki Katayama and US Treasury Secretary Scott Bessent.

According to the Japan Times report by Sakura Murakami, Takaichi said Bessent had indicated that he understood the Japanese government’s economic policy and had not made requests concerning the direction of that policy.

That distinction is important because the Japanese government has continued to present its economic strategy as domestically determined.

Takaichi said her position had not changed and that her administration would continue pursuing a strong economy alongside sustainable government finances. She described this approach as responsible and proactive fiscal policy.

The comments suggest that Tokyo is attempting to separate its broader economic strategy from the immediate question of currency intervention or exchange-rate management.

Has the United States previously intervened with Japan to support the yen?

Japan and the United States have already taken the unusual step of jointly intervening in currency markets.

The intervention followed a period in which the yen had weakened towards ¥164 against the US dollar. According to the Japan Times, the operation represented the first joint action by Tokyo and Washington to support the yen in 28 years. Trump subsequently described the intervention as a sign of friendship between the two countries.

Reuters separately reported that the two governments had conducted coordinated intervention after concerns about the yen’s depreciation intensified. The report noted that the cooperation had become part of wider US-Japan economic discussions.

The intervention demonstrated that currency stability had moved beyond a matter for Japan’s domestic authorities and had become relevant to bilateral economic relations.

However, intervention alone does not determine the long-term direction of a currency. Exchange rates also reflect interest rates, capital flows, investor expectations, economic growth and perceptions of fiscal and monetary policy.

How has Japan responded to pressure over its currency policy?

Japanese officials have generally maintained that the country’s economic policy is being determined according to domestic considerations rather than instructions from Washington.

Takaichi’s latest remarks follow that approach. Rather than announcing a specific exchange-rate target or promising another currency intervention, she discussed policies intended to strengthen the Japanese economy.

She said the government wanted to increase Japan’s potential growth rate and strengthen its supply capabilities through substantial investment in risk management and growth.

Her argument is that a more competitive economy would ultimately strengthen confidence in the yen.

This approach places the currency issue within a wider economic strategy rather than treating the exchange rate as an isolated policy target.

The distinction matters because deliberately attempting to control a currency at a particular level can create tensions with monetary-policy objectives. By contrast, improving productivity, investment and supply capacity can affect the underlying strength of an economy without establishing a formal exchange-rate target.

Why does the weak yen matter to Japanese households and businesses?

The yen’s value has consequences across the Japanese economy.

For exporters, a weaker yen can increase the value of foreign revenues once they are converted into Japanese currency. Japanese companies with substantial overseas operations can therefore benefit from currency translation effects.

Importers face a different situation. A weaker yen increases the yen cost of goods purchased from overseas. This can affect energy, raw materials, food and industrial inputs.

The issue is particularly relevant to Japan because the country relies heavily on imports for many resources and commodities.

Recent reporting has also highlighted the impact of the weak yen on energy-import costs. CNA, citing Reuters, reported in September that yen weakness was contributing to higher energy import costs at a time when energy prices were already under pressure from geopolitical developments.

For consumers, higher import costs can feed into domestic prices. For companies, the effect depends on whether they are exporters, importers or businesses exposed to both domestic and international markets.

This makes currency policy a complicated issue for the Japanese government.

What has Finance Minister Katayama said about the yen?

Katayama has been more explicit about the government’s assessment of the yen’s valuation.

Reuters reported that after Trump’s discussion with Takaichi, Katayama said the two countries had reaffirmed that an undervalued yen was a problem. She also indicated that she expected excessive selling of the Japanese currency to be corrected.

The comments were followed by renewed market attention to the exchange rate.

Other market reporting recorded a movement in the dollar-yen exchange rate after Japanese and US officials made their comments, illustrating how closely traders were watching official statements.

Nevertheless, individual currency movements do not establish a permanent change in exchange-rate direction. Market prices can respond rapidly to statements from policymakers and then move again as investors reassess economic data and interest-rate expectations.

What does Takaichi’s economic strategy mean for the yen?

Takaichi has avoided committing herself publicly to a specific currency level in the interview.

Instead, she argued that the long-term answer lies in improving Japan’s productive capacity and competitiveness.

She said the government was seeking to raise the potential growth rate and strengthen supply capabilities through investment in risk management and growth.

Her stated objective is to build an economy capable of sustaining stronger growth while maintaining confidence in public finances.

Takaichi connected these policies directly with the currency, saying that greater competitiveness would ultimately contribute to trust in the yen.

This represents a broader interpretation of currency strength. Rather than treating a stronger yen solely as the result of intervention or interest-rate policy, the prime minister is presenting economic competitiveness as an underlying source of confidence.

How significant is US-Japan coordination over the yen?

The latest statements indicate that currency policy remains an active part of US-Japan economic relations.

The two countries have already demonstrated a willingness to co-operate directly in foreign-exchange markets, while their finance officials continue communicating about the currency.

Reuters reported in September that Japan’s top currency diplomat Atsushi Mimura had warned markets to take seriously the messages coming from Tokyo and Washington about the yen. He also indicated that Japan remained prepared to act if necessary to curb excessive depreciation.

At the same time, the Japanese government has continued to stress that its wider economic policy is not being dictated by foreign governments.

The result is a policy environment in which Tokyo must balance several objectives: supporting economic growth, maintaining sustainable public finances, containing inflationary pressures, protecting purchasing power and avoiding excessive currency volatility.

For Washington, the currency issue is closely connected with trade competitiveness. For Tokyo, it is also connected with domestic prices, economic growth and confidence in Japan’s financial position.

What is the background to the yen dispute?

The latest dispute follows a prolonged period of yen weakness driven partly by differences between Japanese and US interest rates and broader market expectations.

Japan spent years maintaining exceptionally low interest rates while other major economies, particularly the United States, moved towards tighter monetary policy. The resulting interest-rate differential encouraged capital flows into higher-yielding currencies and contributed to pressure on the yen.

The Bank of Japan has since moved towards higher interest rates, but the yen has remained sensitive to expectations about future monetary policy.

The US government has also increasingly linked currency values with trade concerns. Earlier reporting documented Bessent’s criticism of Japan’s economic policy and his preference for measures that would support a stronger yen. Nippon.com, citing Jiji Press, reported in September that Bessent had previously questioned Japan’s approach to the weaker yen and argued that higher Bank of Japan rates could help address the situation.

The joint US-Japan intervention then added another dimension to the relationship.

The latest comments from Takaichi show that the issue remains unresolved despite those measures.

How could the latest development affect international businesses and trade?

The immediate significance for businesses is that currency policy is likely to remain an important consideration in the commercial relationship between Japan and the United States.

For Japanese exporters, changes in the yen can affect the competitiveness of goods sold overseas and the value of foreign earnings. For US companies competing with Japanese manufacturers, movements in the yen can influence relative pricing.

Import-dependent Japanese companies may face different effects if the currency strengthens, because a stronger yen can reduce the domestic cost of overseas purchases.

Financial markets will also continue to monitor statements from the Japanese government, the Bank of Japan and US Treasury officials because official comments can affect expectations about intervention and interest rates.

However, the latest statements do not establish a new exchange-rate target or announce another intervention. Takaichi’s comments instead emphasise economic competitiveness and domestic policy.

What can be expected from Japan’s currency policy after Takaichi’s comments?

The immediate policy direction described by Takaichi centres on economic investment, stronger supply capacity and sustainable public finances rather than a publicly announced exchange-rate objective.

For businesses engaged in Japan-US trade, the development means that the yen is likely to remain an important part of the bilateral economic discussion. US concerns about the competitiveness of American trade have now been directly communicated to Japan’s prime minister, while Tokyo has acknowledged that an undervalued yen can create problems.

The next developments will depend on several factors, including Bank of Japan interest-rate decisions, movements in US-Japan interest-rate differentials, inflation, capital flows and any further decisions by Japanese authorities concerning currency-market intervention.

The statements from Takaichi, Katayama and Bessent also indicate that policymakers on both sides are continuing to communicate about the currency. For international businesses, this means exchange-rate volatility and policy announcements will remain relevant considerations when assessing Japanese imports, exports, investment and cross-border pricing.