The meeting of Group of 20 finance chiefs this week in Washington, rather than showing unity, revealed a bitter divide among the world's major economies over Russia's invasion of Ukraine, despite no shortage of other pressing issues to discuss.
For Japan, the yen's recent fast-paced depreciation was a central concern it hoped to raise. But despite Finance Minister Shunichi Suzuki taking every opportunity to raise the issue, his efforts to arrest its weakness seem to have borne no fruit.
Suzuki said he discussed with U.S. Treasury Secretary Janet Yellen the yen's "rapid" decline and also touched on the issue during a separate meeting with his counterparts from the Group of Seven developed countries.
But he said none of the G-7 finance ministers and central bankers made comments in response to his concern about the yen, which plunged to a new 20-year low in the 129 range against the U.S. dollar on Wednesday.
"I have said the currency's rapid fluctuations are undesirable, and the movements are fast indeed," Suzuki told a press conference after his first face-to-face meeting with Yellen on Thursday. "We have to monitor developments with vigilance."
The Treasury Department said Friday that the two "underscored the importance of maintaining previous G-7 and G-20 commitments on exchange rates."
The G-7 has taken a position that foreign exchange rates should be determined by the market, but that excessive volatility can have adverse impacts on the economy.
Japanese government officials have stepped up their verbal warnings against disorderly currency movements, but these have had little impact on financial markets.
The financial meetings in the U.S. capital, held on the fringes of spring events of the International Monetary Fund and the World Bank, could have led to deeper discussions on the global economy's gradual recovery from the coronavirus pandemic.
They could have also sent stronger messages on key economic issues, such as inflationary pressures, tightening monetary policies and soaring energy prices.
But as symbolized by the lack of a joint statement by the world's largest 20 economies after their talks, Russia's ongoing assault on Ukraine stole the spotlight.
There was no room for foreign exchange to become a major topic, with a walkout from the G-20 meeting by Western countries' representatives as a Russian official started talking grabbing the attention of most headline writers.
"For the United States, the most important thing is to tame inflation. A stronger dollar is favorable for that," and thus it is unlikely Washington will help Tokyo in supporting the yen, said Keiji Kanda, a senior economist at the Daiwa Institute of Research.
While the Bank of Japan has maintained its powerful monetary easing to keep interest rates near zero, the U.S. Federal Reserve has started raising rates to curb inflation as it runs at its fastest pace in over 40 years.
Economists say the yen's depreciation is likely to persist as the main cause behind it is difficult to solve -- the widening monetary policy gap between Japan and the United States.
A weak yen has been seen as a boon to Japanese exporters as it boosts their overseas profits when repatriated. But combined with surging crude oil and other commodity prices, as is the case now, a sharp fall in the yen becomes a headache for the resource-poor country as it pushes up import costs and could dampen consumer spending.
The benefits of a weaker yen have also been limited recently because exporters and manufacturers have refrained from investing and hiring, and inbound tourists have been shut out amid the coronavirus pandemic, Kanda said.
Japan is not ready for an interest rate hike, with core consumer prices rising just 0.8 percent on year in March. The benchmark indicator of inflation expanded at the fastest pace in over two years but was still well below the Japanese central bank's 2 percent target.
Tsuyoshi Ueno, a senior economist at NLI Research Institute, said that even under current circumstances Japanese consumers are "struggling" as their wages have not increased enough.
According to the Organization for Economic Cooperation and Development, most of its member countries have seen solid wage growth in the past 20 years, while those of Japan have remained flat. Japan's average wage stood at $38,515 as of 2020, up only 0.4 percent from 2000.
Hisashi Yamada, a senior economist at the Japan Research Institute, also said strong wage growth is crucial, especially as raw material and energy prices are expected to remain high and many countries have decided to cut their reliance on Russia for oil and natural gas.
Even if Japan becomes able to make any turn toward exiting its ultraloose monetary policy, without significant pay raises, higher interest rates, meaning also higher borrowing costs, will likely be a blow to the country's lackluster economic recovery.
"The truly difficult part may come after normalizing monetary policy," said Daiwa's Kanda.