Japan's Finance Minister will attend the G20 summit: markets are closely watching his meeting with Bessant, and the yen intervention statement remains in effect.

Japanese Finance Minister Satsuki Katayama announced her attendance at the G20 finance ministers' meeting in Asheville, USA, next week. Market focus quickly shifted to whether she would hold another bilateral meeting with US Treasury Secretary Bessenter—their coordinated intervention in the foreign exchange market last month remains a key variable in the yen's trajectory.

At a press conference following Friday's cabinet meeting, Satsuki Katayama stated that the joint intervention statement was "very powerful and remains effective to this day," a statement interpreted by the market as a reaffirmation of the stance to maintain the stability of the yen. Nevertheless, after a brief jump to 155.20, the yen has retreated to around 160, still some distance from the 40-year low of 164 reached last month, but the overall weakness has not fundamentally changed.

Bank of Japan Governor Kazuo Ueda is also expected to attend the G20 meeting. Bessant has previously publicly stated his anticipation of meeting Ueda in Asheville, further emphasizing the monetary policy discussions at this meeting.

The effectiveness of the joint intervention is questionable, and the yen is under renewed pressure.

Last month, Katayama and Bessant issued a coordinated statement on joint actions in the foreign exchange market, causing the yen to surge to 155.20 at one point, which was seen by the market as a rare signal of coordinated exchange rate policies between Japan and the United States. However, this boosting effect failed to last, and the yen subsequently weakened again, currently hovering around 155.41, a significant drop from the high point after the statement was issued, and still quite far from the 40-year low of nearly 164 last month.

The market is now closely watching whether Katayama will hold a sideline meeting with Bessente during the G20 summit to determine whether there is any willingness and room for further coordination between the two sides.

Katayama: Enhancing Japan's growth potential will strengthen the yen's credibility.

In response to concerns about the continued weakness of the yen, Katayama did not stop at foreign exchange market intervention but also linked exchange rate stability to structural policies. She stated that the Japanese government is committed to promoting investment and strengthening growth potential, which will enhance the credibility of the yen by improving Japan's global competitiveness.

Kazuo Ueda's attendance at the G20 is expected to provide the market with a window to further observe the direction of Japan's monetary policy, although the Bank of Japan has not yet officially confirmed his attendance.

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