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Morning Edition · Friday, September 25, 2026UpdatedPublished at 7:42 AM EDT · New York
Japan Says Trump Raised the Weak Yen, and the Dollar Fell Toward 158
Finance Minister Satsuki Katayama also said Prime Minister Takaichi treats the yen's undervaluation as a problem, the clearest official language yet from a government elected on growth.
Updated at 7:42 AM EDT
The dollar's drop did not "steady" as reported this morning — it extended through Friday, with the yen posting its biggest one-day gain in more than two weeks.
Japan's finance minister, Satsuki Katayama, told reporters on Friday that President Donald Trump expressed concern about the weakness of the yen during the recent Japan-United States leaders' meeting. She added that Prime Minister Sanae Takaichi regards the yen's undervaluation as a problem, language reported by Jiji Press as the government's position rather than a personal view.
The dollar fell to about 158.33 yen in Tokyo morning trading on the remarks, and the move did not reverse as the session went on. By Friday afternoon the yen had strengthened as much as 0.8 percent to 157.67 per dollar, its biggest one-day gain in more than two weeks and the strongest performer among Group of Ten currencies, even after the minister for economic and fiscal policy said the country is no longer in an era for monetary easing or for Abenomics-style stimulus. Traders stayed on alert for the risk that Tokyo could follow its words with actual intervention, after weeks in which the dollar had climbed toward the closely watched 160-yen level on strong American data, a hawkish Federal Reserve and rising Treasury yields.
The interest rate gap between the two countries remains the deeper force in play. The Federal Reserve raised its policy rate on September 16 and most of its officials expect another increase this year, while the Bank of Japan is normalising from near zero in small steps. That gap, not sentiment, sets the funding cost that drives capital out of yen, and it has not closed. What Friday showed is that officials can still move a session more than the interest rate gap alone would predict: verbal pressure from Katayama, without any confirmed intervention, was enough to produce the yen's sharpest daily advance in weeks.
What is new is the political alignment. A Japanese government that was expected to favour a weak currency for exporters is now describing the yen as too cheap, and the American president is reported to agree. That combination raises the probability of coordinated action and of faster Bank of Japan tightening, both of which raise the cost of borrowing yen to fund positions elsewhere, and Friday's rally suggests the market is starting to price that risk in.
Veracity: Corroborated
88/100- If true, who benefits
Tokyo gains a stronger verbal case for supporting the yen by citing American agreement, and Japanese officials gain cover for faster Bank of Japan normalisation.
- The nuance
The account of what President Trump said exists only in Finance Minister Katayama's readout to Japanese reporters with no American confirmation, and the article omits that Tokyo and Washington already conducted joint yen-buying intervention on July 31, which makes this less novel than presented.
An open-source-intelligence read of how likely this story is true with its real nuance, not a judgment of any outlet. It assesses the claim, weighing independent and adversarial reporting. How we label confidence.
What this means
Cheap yen funding has underwritten leveraged positions in higher-yielding assets for years, and every step that raises the cost of that funding forces some of those positions to be closed. Japanese exporters and inbound tourism lose an advantage if the yen strengthens, while Japanese households and importers of food and fuel gain purchasing power. Holders of Japanese government bonds face the direct cost of faster normalisation through lower prices. The outcome turns on the Federal Reserve: if American rates keep rising, official statements will keep failing to move the yen for more than a session, and pressure for actual intervention builds.
Synthesized from: Jiji Press · Minkabu FX (Trump comment) · Minkabu FX (Takaichi on undervaluation) · Minkabu FX (market reaction)
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Comments
1Sep 25, 5:16 AM · edited
Durable yen appreciation requires a Bank of Japan rate step that narrows the funding spread, since at current differentials yen carry positions remain profitable through episodes of verbal intervention.