TOKYO—Japan will continue to seek a balance between fiscal sustainability and economic growth, the country’s finance minister said, even as ministries submitted record budget requests of nearly $918 billion.
“I don’t believe it is accurate to describe this as a significant increase,” Katayama said at a news conference on Friday.
The remarks came amid continued concerns over Japan’s fiscal sustainability, which have sparked a rise in government bond yields and weighed on the yen. Yields in Japan remain elevated, in line with other global bonds, but the yen is finally showing some signs of recovery. The currency has strengthened in recent sessions, snapping a run of persistent weakness despite historic Japan-U.S. intervention in the foreign-exchange market—an operation backed by Treasury Secretary Scott Bessent.
Expectations for an imminent interest-rate increase by the Bank of Japan have also contributed to the upward pressure on yields, with the 10-year Japanese government bond yield recently hitting 3%—the highest level since September 1996. On Friday, Katayama pushed back against speculation that Bessent was applying pressure on Japan to raise interest rates, saying that she had explained Takaichi’s pursuit of both sustainable debt conditions and economic growth to him when they met on the sidelines of the Group of 20 finance chiefs’ meeting.
Write to Megumi Fujikawa at [email protected] The yen was last trading at 156.05 per dollar, after briefly reaching a one-month high that had been seen around the time Tokyo intervened in the foreign-exchange market in coordination with Washington.
When she showed him a local newspaper article about the topic, Bessent responded by saying “good,” Katayama said. Those expecting Katayama to comment on the yen on Friday were left waiting.
