Finance Minister Katayama used her post-cabinet press conference on 29 September to restate Japan's line on the yen after a 25 September telephone call with US Treasury Secretary Bessent. She said the government regards undervaluation of the yen as a problem in general terms, and that she reaffirmed the point on the call. She would not discuss levels.
The reserve-fund decision taken the same day, which covers preparations for the food consumption tax cut and worker relief payments, was covered in an earlier Tokyo Brief article. This piece covers what Katayama added on the yen, bond yields and financial supervision.
The yen: a general-terms concern, no levels
Katayama said the call with Bessent was an exchange of views on financial market developments and reconfirmed that Japan and the US would strengthen cooperation. She said she reported to Prime Minister Takaichi immediately, and that Takaichi's separate call with President Trump did not touch on currency matters.
The yen point came from the recent Japan-US summit in New York, she said, where Takaichi remarked that undervaluation of the yen is a problem in general terms. Katayama said she told Bessent that Takaichi is not a reflationist, as Takaichi herself says. Going forward, she said, the finance ministry will keep in close contact with the US Treasury and work toward orderly currency markets, as in the separate statements each side issued on 3 August.
Bond yields: a calm reading, on her account
Asked about long-term yields, which the questioner described as still in the 3% range, Katayama declined to comment on the numbers. She said the ministry, as the body responsible for debt management, is in careful dialogue with market participants.
She then relayed what she said she heard from the JPMorgan chairman and the investor Druckenmiller, who visited Tokyo last week. In her account, neither regarded the rise in US yields as abnormal. She said they pointed to inflationary pressure from commodity markets including oil, higher government spending in many countries, and large corporate bond issuance by hyperscalers, which she said reverses the earlier crowding out of private borrowers by government debt. Nearly all sovereign yields are rising at a similar pace, she said, and Japan's rise is not among the larger ones. She said she shares that view.
Reserve fund and the Diet
On the reserve fund, Katayama said preparation has to start at once, citing the cabinet-approved outline. She named smart registers and POS registers at small businesses, changes to municipal tax systems for the payment scheme, and public-account registration as the issues the money addresses. The cabinet decision itself put ¥111.87bn to use across the Cabinet Office, Digital Agency, finance ministry and economy ministry.
Asked whether spending before Diet deliberation showed the government's determination to pass the legislation regardless of the Upper House outcome, she said the ministry was not discussing Diet tactics.
Supervision: an inspection office that does not exist yet
Katayama corrected the premise of a question about the Financial Services Agency's planned inspection planning office: it has not been created. The agency has only made a request for it in the headcount request for fiscal 2027. She said the intent reflects fraud and management problems at regional financial institutions. The agency is considering building up staff for systematic, medium-term inspection monitoring, including at local finance bureaus, and improving methods by reviewing past inspection cases after the fact. She said she had not heard whether the old line-sheet method of sampling individual loans would return.