US Treasury Secretary Janet Yellen will visit Japan for the first time after taking office and will meet with Finance Minister Suzuki on the 12th to discuss sanctions on Russia, which continues to invade Ukraine.
It will also be interesting to see what kind of discussions will be held on the trends in the foreign exchange market, where the yen is weakening and the dollar is strengthening.
Treasury Secretary Janet Yellen visited Japan for the first time since taking office last year before attending the G20 = Finance Ministers and Central Bank Governors Meeting of 20 major countries to be held in Indonesia from the 15th of this month, and the Minister of Finance Suzuki on the 12th. I will meet with you.
The talks are expected to discuss strengthening sanctions on Russia as Russia's military invasion of Ukraine prolongs.
Regarding sanctions on Russia, Prime Minister Kishida, who met in Germany late last month, and President Biden of the United States have agreed to cooperate in the G7 to set an upper limit on the trading price of Russian oil.
At the Japan-US Finance Ministers' Meeting on the 12th, concrete measures to increase pressure on Russia are expected to be on the agenda.
In addition, given that the yen is depreciating in the foreign exchange market these days, Japan wants to reconfirm that it will promote close communication between currency authorities, and what kind of opinions are there regarding the issue of foreign exchange? It will be noticed whether it will be exchanged.
Strengthening sanctions against Russia poses challenges in energy procurement
At the Japan-US Finance Ministers' Meeting, it is expected that discussions will be held on strengthening sanctions on Russia.
Sanctions on Russia were also on the agenda at the meeting between Prime Minister Kishida and US President Joe Biden at the G7 Summit in Germany last month.
Among them, they agreed to set an upper limit on the transaction price of Russian oil in cooperation with the G7 in order to prevent Russia from using the profits earned from oil exports for war expenses.
Japan and the United States will discuss this at the administrative level in the future, but at the meeting between Finance Minister Suzuki and Treasury Secretary Janet Yellen on the 12th, it is expected that opinions will be exchanged on concrete measures to strengthen sanctions. ..
As Japan moves to strengthen sanctions in line with G7 countries, Russian President Putin suddenly participated in the LNG = liquefied natural gas and oil development project "Sakhalin 2" on the 30th of last month. Signed a presidential decree ordering the entity to change to a new Russian company.
It is also concerned that this will affect the securing of LNG, which is the fuel for power generation, for Japan.
The government has indicated that the "Sakhalin 2" project will not be withdrawn as it is essential for the stable supply of electricity and gas in Japan, but it is working with LNG producing countries to secure other suppliers. I'm going.
Minister of Economy, Trade and Industry Hagita would like to attend the Energy Ministers' Meeting of the Framework Quad of the four countries of Japan, the United States, Australia and India in Australia on the 13th, and encourage the United States and Australia to supply LNG.
Japan is faced with a difficult response as to how to procure energy in a stable manner while increasing pressure on Russia in collaboration with G7 countries.
Forex market trends discussions are also the focus
The meeting between Finance Minister Suzuki and Treasury Secretary Janet Yellen will also focus on what kind of discussions will be held on the trends in the foreign exchange market.
In the foreign exchange market, the yen depreciated to the low 137 yen level per dollar in the Tokyo market on the 11th, the lowest level in about 24 years.
The background is that the Fed, the central bank of the United States, is accelerating monetary tightening, while the Bank of Japan has shown a willingness to continue monetary easing.
Regarding the impact of the recent depreciation of the yen on the Japanese economy, Minister of Finance Suzuki has expressed the recognition that "there is a negative side", and at this meeting, Japan thinks that sudden fluctuations in exchange rates are not desirable. I would like to confirm the above and show an attitude of working closely with the monetary authorities of Japan and the United States.
On the other hand, for the United States, if the yen depreciates and the dollar strengthens, the performance of its export companies may be adversely affected, but rather, what is worrisome now is record inflation.
In the United States, the rate of increase in consumer prices in May has reached its highest level in about 40 and a half years, and how to curb inflation has become a priority issue.
The Fed made a big 0.75% rate hike at last month's meeting, and Powell acknowledged that the stronger dollar against the backdrop of the rate hike would curb inflation by pushing down import prices.
Given these different views on foreign exchange between Japan and the United States, one of the focal points is what kind of discussions will be held on the foreign exchange market at the meeting on the 12th.
Former Finance Minister Nakao "I think the Japanese side will tell the negative effects of the depreciation of the yen to the United States."
Regarding the outlook for the Japan-US Finance Ministers' Meeting, Takehiko Nakao, President of Mizuho Research & Technologies, a former finance minister and president of the Asian Development Bank, said, "The concern in the Japanese economy is that energy prices and food prices are global. The problem of yen depreciation is being added to the above. The Japanese bank also says, "The rapid depreciation of the yen in the current form will have an adverse effect." For the Japanese side, the yen. I think we will properly convey that Ahn has a negative impact on people's lives and the Japanese economy as a whole. "