Japan is "deeply concerned" over global economic fallout from U.S. President Donald Trump's trade tariffs, Finance Minister Katsunobu Kato said on Thursday in the government's strongest warning yet as the two nations began trade talks.
In an interview with Reuters in Tokyo hours after the talks began in Washington, Kato also voiced concern over recent volatile market moves triggered by Trump's tariff announcements, saying they could hurt Japan's economic recovery.
"The recent U.S. tariff measures affect various industries and heighten uncertainty. We're deeply concerned they could affect Japan's economy, as well as the global economy, through various routes such as trade and financial markets," said Kato, who plans to go to Washington next week for meetings of the International Monetary Fund and the Group of 20.
Kato is also expected to meet separately with Treasury Secretary Scott Bessent to continue the talks begun by Prime Minister Shigeru Ishiba's top tariff negotiator, Economic Revitalisation Minister Ryosei Akazawa. Trump unexpectedly joined those talks, which included Bessent.
"There's a risk of exerting downward pressure on Japan's economy," Kato said of the U.S. tariffs and the ensuing market volatility, in his first media interview since Trump announced "reciprocal" tariffs on many nations on April 2.
Kato said he will "closely communicate" with the U.S. on currency issues, adding Tokyo and Washington have long agreed that excessive volatility and disorderly moves in currency rates are undesirable.
"It's important for currency rates to move stably, reflecting fundamentals. There's no change to the government's concern over currency market developments, including speculative moves," he said. "We need to scrutinise how the U.S. tariff measures affect financial market moves, including currency rates."
Kato declined to comment on how any discussions on currencies could unfold once he meets Bessent, saying that doing so now would be premature and cause undue speculation in the market.
"The only thing I can say is that we will actively exchange views based on Japan's basic stance" on currencies, Kato said, when asked about market speculation that Washington could ask Japan to join a coordinated effort to weaken the dollar.
Trump has indicated he wants the trade talks to include his accusations that Japan intentionally weakens the yen to help its exporters and his complaints that Japan does not pay enough to support U.S. troops based in the country. Japan, which denies manipulating its currency, wants to avoid such topics.
