TOKYO – Japan’s Finance Minister Katsunobu Kato expressed serious concerns on Thursday (April 17) about the potential global economic consequences of US President Donald Trump’s trade tariffs, marking the government’s strongest statement yet as trade talks between the two countries began.

In an interview with Reuters, Kato warned that the tariffs could destabilize markets and hinder Japan’s economic recovery. He pointed out that the US measures impact multiple industries and create uncertainty, which may affect Japan and the global economy via trade and financial markets. Kato is scheduled to attend the upcoming International Monetary Fund and G20 meetings in Washington, where he will also hold talks with US Treasury Secretary Scott Bessent. These discussions are a continuation of those initiated by Prime Minister Shigeru Ishiba’s chief tariff negotiator, Ryosei Akazawa, with Trump unexpectedly joining the earlier meetings.

Kato highlighted the risk that the tariffs and subsequent market fluctuations pose to Japan’s economy. He emphasized the importance of stable currency rates that reflect economic fundamentals and reiterated that Tokyo and Washington agree on avoiding excessive currency volatility. Although he refrained from discussing specific currency negotiation plans with Bessent, Kato affirmed that Japan would maintain its position on currency matters. He declined to comment on speculation that the US might push Japan to weaken the dollar in a coordinated move.

Trump has previously accused Japan of intentionally devaluing the yen and not contributing enough to US military costs in Japan—claims Tokyo denies and hopes to avoid in the trade dialogue. Akazawa confirmed that currency issues were not discussed in the most recent round of talks and stated that both sides agreed to leave those matters to financial authorities.

He also dismissed the idea of coordinated dollar-weakening efforts, noting that Japan only intervenes in markets during speculative swings and does not manipulate the yen. Itsunori Onodera, the policy chief of Japan’s ruling party, said Japan should focus on strengthening the yen through industrial competitiveness rather than manipulation.

Despite Japan's cautious approach, some analysts suggest the Trump administration may criticize the Bank of Japan (BOJ) for its long-standing monetary easing policy, which contributed to a weaker yen. Though the BOJ has recently started raising interest rates, they remain historically low. Kato noted that monetary policy is the BOJ’s responsibility but said the government would continue discussing economic developments with the central bank. He reiterated trust in the BOJ’s ability to steer policy toward a stable 2% inflation target.

Recognizing Japan’s dependence on global trade, Kato emphasized the need for coordinated international efforts to counter protectionism. He believes Japan should explain how it can support the US in revitalizing manufacturing and reducing its trade deficit. He also challenged the notion that US protectionism could undermine multilateral cooperation, saying that while national interests come first, policymakers must find mutually beneficial solutions.

Disclaimer: This image is taken from Reuters.