Japan’s Kato Says Domestic Reform the Best Way to Fix Imbalances

Katsunobu Kato, Japan's finance minister, during an interview in Tokyo, Japan, on Friday, June 13, 2025. Kato said discussions with market participants are a key factor for ensuring government bonds are bought and sold stably ahead of a closely watched ministry meeting with investors. Photo by Shoko Takayasu /Bloomberg

Article content

(Bloomberg) — Japan told the Group of 20 countries that tariffs are not an appropriate measure to fix imbalances, and that countries facing such situations need to address them through domestic efforts, said Finance Minister Katsunobu Kato.

Article content

“Japan said that tariffs aren’t really the right tool to fix excessive current accounts imbalances,” Kato told reporters Thursday. US Treasury Secretary Scott Bessent did not attend the gathering.

Article content

Article content

Article content

Kato spoke after the first day of the Group of 20 Finance Ministers and Central Governors’ meeting near the city of Durban on South Africa’s east coast. He was a lead speaker in several sessions, including a closely watched one on the global economy.

Article content

Article content

The minister’s comments come as the global economy braces for higher US tariffs ordered by US President Donald Trump.

Article content

Many G-20 participants expressed the view that the world economy hasn’t seen the potential risks fully materialize as many might have expected, and market stresses appear to have eased somewhat, a Finance Ministry official accompanying Kato said. Still, the official said that many participants, including international organizations, emphasized the need to stay cautious about risks going forward.

Article content

The yen has experienced increased volatility since April when Trump announced sweeping tariffs. Amid political uncertainty ahead of Japan’s Upper House election, the currency is currently trading at its lowest level since before the trade war began. 

Article content

The US plans to impose a blanket 25% tariff on Japanese imports starting Aug. 1, according to a letter circulated by Trump earlier this month. Months of negotiations between Japan’s top negotiator, Ryosei Akazawa, and Trump’s aides yielded little clear progress, with automotive tariffs remaining a major sticking point.

Article content

The escalation of Trump’s tariff policies is prompting many countries to explore stronger international cooperation. The European Union is considering coordinated measures with partners, including Canada and Japan, Bloomberg reported earlier. 

Article content

Kato said he emphasized at the meeting the significance of an open and free multilateral trade system and predictable economic management, though he said there was no specific talks on collaboration to counter the US.

Article content

—With assistance from Matthew Hill.

Article content