Yen traders heads up – Japan finance minister Suzuki denies bilateral meeting with Yellen

Bank of Japan Governor Ueda and Japanese Finance Minister Suzuki spoke over the weekend, at the conclusion of the G7 meeting in Italy.

Suzuki said he did not have a one-on-one meeting with US Treasury Secretary Yellen. This seems to indicate that there is no discussion about coordinated intervention by Lynn. Before the weekend, Deputy Foreign Minister for International Affairs Masato Kanda (the official who will instruct the Bank of Japan to intervene when he deems it necessary) said there was no need for a meeting.

Earlier this month, Yellen was less than encouraging of the idea:

A few days later there was more hesitation on Yellen's part:

Not to hammer this point too much, but Yellen reiterated the same thing last week, saying that intervention should be rare and announced in advance.

So, it was just a show for Team Suzuki and Yoda after the G7.

Suzuki:

• – Emphasizing the G7 commitments regarding foreign exchange
• He said many factors contribute to higher yields
• He warned against keeping interest rates above zero

And with interest rates rising in Japan as well

• He called for not keeping interest rates above zero. “We must fully realize that a world of positive interest rates has arrived…and we will make progress in restoring financial health with a greater sense of urgency than ever before.”

Bank of Japan Governor Ueda seemed happy to let Suzuki handle the thorny issues, brushing the whole matter aside by saying:

• Financial markets determine long-term bond yields in principle
• Fixed interest markets will be monitored

Ueda did not talk about the future interest rate path, nor did he specify much about the chances of reducing purchases of Japanese government bonds at the next policy meeting (which will be in June).