By Megumi Fujikawa

TOKYO--Japan continues to maintain a tight dialogue with the U.S. on foreign-exchange moves, Finance Minister Satsuki Katayama said Tuesday, as traders remain on alert about potential market intervention.

"I have been in close communication with U.S. officials over the last four months, and our relationship has become even more tightly knit during this time," Katayama said at a regular news conference.

The finance minister declined to comment on a local media report saying that the rate check conducted by U.S. authorities last month was led by Treasury Secretary Scott Bessent.

"Since we both have our own responsibilities to protect, I think we are at a point where we can both say we are doing our jobs thoroughly," Katayama said.

Rate checks are widely seen as preparation for currency intervention so it raised alarm among forex traders that the U.S. and Japan might conduct joint operations to prop up the yen. Last week's release of the minutes of the Federal Reserve's meeting in January confirmed that the New York Fed checked rates on behalf of the U.S. Treasury.

In late January, the yen surged abruptly, strengthening to the mid-155 range after approaching the 160 danger zone. The move was widely attributed to rate checks by U.S. authorities, in possible coordination with Japan. However, data from Japan's Ministry of Finance later confirmed that the Japanese government was not behind the rally.

Markets are still bracing for currency intervention as the yen remains close to 160 against the dollar-a level not seen since July 2024, when the government stepped in with massive dollar sales to prop up the currency. The dollar stood at 155.08 yen in Tuesday trading.

Given that President Trump has made comments perceived as welcoming a softer dollar, the U.S. would be unlikely to object if the Japanese government decides to conduct yen-buying, dollar-selling operations, said SMBC Nikko Securities economist Junichi Makino.

If intervention occurs, the yen could potentially rebound to its fair value based on interest-rate differentials--estimated at around Y142 per dollar, Makino said.

Regarding the U.S. Supreme Court's ruling on Trump's tariffs, Katayama vowed to continue monitoring further developments and ensure the steady implementation of the investments Japan has pledged to make in the U.S.

Trump is considering new national security tariffs, following a Supreme Court ruling that invalidated many of the president's second-term levies.

Write to Megumi Fujikawa at megumi.fujikawa@wsj.com

(END) Dow Jones Newswires

February 23, 2026 23:05 ET (04:05 GMT)

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