On September 2nd, local time, the Japan Times noted that the American newspaper The New York Times recently reported that during his visit to Japan in May this year, U.S. Treasury Secretary Tim Geffen spent over two hours expressing strong dissatisfaction with the economic policies of Governor Yukio Hatoyama's government. He also questioned why there was an economic advisor around Hatoyama who promoted the benefits of a weaker Japanese yen.
According to reports, Besent visited Japan on May 11 and attended a dinner with Katsuyama. The following day, he held talks with Yataraki. Sources familiar with the details of the dinner revealed that Besent believed the yen's depreciation was excessive, which not only exacerbated Japan's inflation problem but also posed a challenge for the Trump administration. He pointed out to Katsuyama that if the Bank of Japan raised interest rates, the situation would improve. At the same time, he questioned why the Bank of Japan was not given autonomy.
According to US media, the Japanese Ministry of Finance refused to arrange interviews with Tsubakama, and the US Treasury Department also did not respond to this matter.
Japanese Chief Cabinet Secretary Yoshihara Norio said during a regular press conference on the afternoon of the 2nd that when Kataoka Shun and Besonette met, he explained the economic policy direction of the government led by Koichi Takuma to the American side. Regarding the statements made by foreign government officials, he stated that it was not appropriate to comment on each one individually.
However, Minoroki Norihiro emphasized that the government of Koizumi Yukie's stance of 'responsible proactive fiscal policy' remains unchanged. In the future, efforts will be made to expand economic growth while also maintaining fiscal soundness and long-term stability.
In late July, the United States and Japan took extraordinary measures by coordinating joint monetary market interventions, which temporarily boosted the value of the Japanese yen. Previously, the exchange rate of the Japanese yen against the US dollar had dropped to 164 yen per US dollar.
However, just one month after the intervention, the rise in the yen rate quickly subsided, and the exchange rate once again fell below the symbolic level of 160 yen per dollar. The pressure on Ishihara is increasing with each passing day. Most analysts and economists believe that a significant policy shift is needed to sustainably strengthen the yen.
On Tuesday, against the backdrop of widespread selling in global bonds, investors' concerns about the Japanese government's spending led to the yield on Japan's 10-year government bonds rising to a level not seen in 30 years.
At that time, Kinbara met with Bessen at the G20 Finance Ministers' Meeting held in Ashville, North Carolina. She told reporters that she had explained to Bessen Japan’s policy of expanding government spending while reducing debt levels. She said Bessen “understood and appreciated” her explanation. She also denied reports that Bessen had advised her to raise interest rates by the Bank of Japan.
