Japan Warns U.S. Over Yen Depreciation as Dollar Hits One-Year High

Japan’s Finance Minister Satsuki Katayama has raised serious concerns over the rapid weakening of the Japanese yen, describing its recent movement as a “one-sided depreciation,” during a meeting with U.S. Treasury Secretary Scott Bessent in Washington. The comments came after the yen fell to one-year lows against the U.S. dollar, intensifying market attention on Japan’s currency policy and global financial stability.

Speaking to reporters following a bilateral discussion held on the sidelines of a multilateral meeting focused on critical mineral supply chains, Katayama said she clearly conveyed Tokyo’s unease about the yen’s sharp decline. According to her remarks, Secretary Bessent acknowledged and shared Japan’s concerns, signaling alignment between the two countries on the risks posed by excessive currency volatility. Currency stability remains a key issue for Japan, as a rapidly weakening yen can drive up import costs, fuel inflation, and disrupt economic planning.

The yen’s decline accelerated after reports emerged that Japanese Prime Minister Sanae Takaichi may call a snap general election as early as February. The move is widely seen as an attempt to capitalize on her strong approval ratings and secure a mandate for expansionary fiscal policies. Following the report, the U.S. dollar surged above the 158 yen level, reaching its highest point in a year and adding pressure on Japanese authorities.

Beyond currency issues, Katayama also used the multilateral meeting to voice Japan’s objections to China’s recent export restrictions. She criticized Beijing’s ban on exports of certain dual-use items destined for Japan’s military, which may include critical minerals essential for both civilian and defense applications. Katayama warned that the restrictions are problematic due to their broad scope, vague language, and inclusion of re-export controls that could affect third countries, including those represented at the meeting.

The discussions highlight growing global concerns over currency fluctuations, geopolitical tensions, and supply chain security, particularly in critical minerals. As Japan and the United States continue close coordination on economic and strategic issues, markets will be watching closely for any policy signals aimed at stabilizing the yen and addressing trade restrictions that could impact global growth.