Currency Talks: U.S. and Japan's Exchange Rate Standoff

In a noteworthy development, U.S. Treasury Secretary Scott Bessent and Japanese Finance Minister Katsunobu Kato have reached a consensus that the current dollar-yen exchange rate aligns with fundamental market principles, according to a statement from the U.S. Treasury Department.

The dialogue took place in Canada during the Group of Seven finance ministers' meeting. The U.S. is keen to address its trade deficit, focusing on exchange rates amid speculation that Japan may face efforts to appreciate the yen, offering U.S. manufacturers an edge.

However, this stance wasn't wholly corroborated by the Japanese side as neither Bessent nor Kato confirmed discussions on currency targets. Japan's currency representative Atsushi Mimura clarified that the talks centered on maintaining market-determined rates and curbing volatility.

(With inputs from agencies.)