Finance Minister Satsuki Katayama has called for Group of 20 policymakers to closely monitor financial markets, speaking against a backdrop of renewed pressure on Japan’s currency and a selloff in bonds around the world in recent weeks. She also said there’s been no change in the stance of Washington and Tokyo since their joint intervention to prop up the yen in July. The yen weakened after U.S. consumer price data Wednesday showed inflation accelerating to its fastest in five months.
The currency briefly touched ¥158.95 per dollar, but later pared its losses as U.S. Treasury yields declined. The yen rose in Thursday trading.
Katayama said Group of Seven and G20 finance chiefs discussed in Bangkok a range of challenges facing the global economy, with G7 members agreeing to conduct tabletop exercises to prepare for frontier AI-related incidents. In terms of surging global bond yields, Katayama said earlier Thursday that Japan is among the few advanced economies in a position to make a credible case for fiscal sustainability. She said Prime Minister Sanae Takaichi and her administration have repeatedly made clear their commitment to steadily reduce the nation’s debt-to-GDP ratio and keep government bond issuance at appropriate levels.
Katayama said that some officials at the Bangkok meetings cited massive private investment in AI and data centers as an unavoidable factor driving bond yields higher globally. She told her counterparts that governments needed to set credible fiscal sustainability targets and create budget space for growth-enhancing investment to address the problem. Katayama also confirmed her official appointment as chair of the Development Committee, a joint ministerial forum of the World Bank and International Monetary Fund.
She will serve a two-year term and is expected to preside over her first meeting during the institutions’ spring gatherings in Washington next April.
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