TOKYO: Japan does not manipulate the currency market to weaken the yen, Finance Minister Katsunobu Kato told parliament countering accusations from US President Donald Trump that Japan intentionally depreciates its currency to help exporters. The remarks came ahead of Kato’s scheduled visit to Washington next week, where he may hold a bilateral meeting with US Treasury Secretary Scott Bessent on the sidelines of the G20 finance leaders’ gathering and spring IMF meetings.

The bilateral talks, if held, will be the primary venue in which Japan and the US will discuss the thorny topic of exchange rates as part of broader tariff negotiations that kicked off on Wednesday. “Japan does not manipulate the currency market to intentionally weaken the yen, as seen by the fact our latest action was to conduct yen-buying intervention,” Kato told lawmakers when asked about Trump’s comments criticizing Japan for giving its exports a trade advantage by weakening the yen.

While saying he was aware the US was interested in discussing exchange-rate matters, Kato declined to comment on what could actually be debated. He also said no date has been fixed yet on the possible meeting with Bessent. The yen’s recent gains have been driven in part by market expectations the US may press Japan to join a coordinated effort to weaken the dollar and help narrow its huge trade deficit.

In March, Trump said he told the leaders of Japan and China they could not continue to reduce the value of their currencies, as doing so would be unfair to the United States. Bessent has also said he was looking forward to discussions with Japan on tariff, non-tariff barriers and exchange rates.

Japan’s top trade negotiator, Ryosei Akazawa, said exchange rates did not come up in Wednesday’s trade talks with the US, adding that both sides deferred to an earlier agreement between their leaders that currency matters would be set aside for talks between their finance chiefs. “If the US side desires, finance minister Kato will likely engage in discussions on exchange rates,” Akazawa told a news conference on Friday, adding that any discussion between the two countries’ finance chiefs on currency rates will be part of a broader package of the bilateral trade deal.

Akazawa’s remark has shifted the market’s attention to Kato’s possible meeting with Bessent next week, which would be the first face-to-face talks between the two finance chiefs. Policymakers around the world will gather in Washington for the spring International Monetary Fund (IMF) meetings that will take place from Monday through April 26.

Any discussions on the yen could affect the Bank of Japan’s monetary policy as its ultra-low interest rates, and the slow pace at which it is pushing up borrowing costs, could come under attack by the US for keeping the yen weak, some analysts say. Speaking in parliament on Friday, BOJ Governor Kazuo Ueda declined to comment on the yen’s levels, and said the central bank will keep raising interest rates if the economy moves in line with its forecasts.

“We will guide monetary policy appropriately from the standpoint of stably and sustainably achieving our 2 percent inflation target,” Ueda said when asked by a lawmaker whether the BoJ, under US pressure, could raise rates at its next meeting on April 30-May 1. With Trump’s tariff decisions jolting markets and stoking fears of a global recession, the BOJ is widely expected to keep interest rates steady at 0.5 percent and cut its growth forecasts at the April 30-May 1 meeting. — Reuters