Japan’s Prime Minister Ishiba stated that the country is not engaging in a currency devaluation policy. He mentioned that he has not received any communication from Trump regarding foreign exchange policy.
Over the last decade, Japanese authorities have consistently defended their loose monetary policy as a measure against deflation and low inflation, asserting that the weaker yen is merely a consequence. This position has been communicated to G7 partners, with no public dissent from any member, including the United States.
Japan’s Stance On Currency Policy
Ishiba’s remarks reinforce what we have seen from Tokyo for years: policymakers insist that the yen’s depreciation is a by-product of domestic economic measures rather than an intentional effort to weaken the currency. This line has been maintained in international discussions, with no direct pushback from other major economies.
Washington’s response remains unclear. If there had been explicit concerns from the White House, we would likely have seen some indication from either government. That absence suggests that, at least for now, currency policy is not a pressing issue in US-Japan relations. However, past disputes over exchange rates show that this can change quickly, particularly if economic conditions shift in a way that draws renewed attention to currency movements.
For those monitoring market movements, what matters is how authorities in Tokyo act rather than what they say. Historically, statements denying intervention do not always align with reality. Japanese officials have a track record of verbal intervention—publicly downplaying the country’s influence on the exchange rate while taking steps to guide it privately. That pattern means traders should approach official remarks with a degree of scepticism.
If pressure on the yen intensifies, policymakers could take stronger steps under the justification of maintaining orderly market conditions. Any move in that direction would likely be framed as an effort to curb excessive volatility rather than a shift in currency policy. Given past behaviour, a sharp decline in the yen could prompt at least some form of response, even if officials continue to insist that their actions are unrelated to targeting the exchange rate.
Market And Policy Outlook
Market participants should also be mindful of policy signals emerging from the US. While there has been no overt challenge to Japan’s stance so far, the potential for a shift remains. If Washington were to introduce measures linking trade and foreign exchange policies more directly, that could inject further uncertainty into yen positioning.
With the yen’s direction dependent on both domestic and international dynamics, staying alert to both policy actions and political rhetoric will be necessary. Official statements provide a reference point, but they are not always a clear indicator of what will happen next. Traders who pay close attention to both words and actual decisions will be better prepared for what comes next.
