Japanese Finance Minister Shunichi Suzuki and U.S. Treasury Secretary Janet Yellen on Tuesday condemned Russia's invasion of Ukraine, saying the unjustifiable war has raised exchange rate volatility and caused other challenges.
At their meeting in Tokyo, the two officials confirmed they will continue to consult closely on exchange markets and appropriately cooperate on currency issues as the increased volatility can adversely influence economic and financial stability.
"I conveyed to her the Japanese government's concern over the recent rapid depreciation of the yen (against the U.S. dollar) that high volatility and disorderly fluctuations will negatively impact the economic and financial stability," Suzuki said at a press conference after the meeting.
Yellen's visit to Japan from Monday, her first trip to the Indo-Pacific region as treasury secretary of President Joe Biden's administration, comes as the yen's rapid fall to a 24-year low against the dollar has increased the cost of living in Japan, which is largely dependent on foreign countries for energy resources and raw materials.
The currency's depreciation mainly stems from a widening interest rate gap between Japan and the United States, where the Federal Reserve remains aggressive in its fight to tame historic levels of inflation.
They also renewed their commitment to addressing other urgent challenges, such as higher food, energy and commodity prices as well as growing food insecurity compounded by Russia's ongoing war against Ukraine, in line with commitments made among Group of Seven developed nations and Group 20 major economies.
"We welcome G-7 efforts to continue exploring ways to curb rising energy prices, including the feasibility of price caps where appropriate," Suzuki and Yellen said in a joint statement.
The idea of capping Russian oil prices was brought up at a recent G-7 summit meeting, as such a measure could put downward pressure on global energy prices.
The G-7 groups Britain, Canada, France, Germany, Italy, Japan and the United States plus the European Union.
The Treasury Department plans to hold talks with major importers of Russian oil, such as India, in the following weeks to create a highly effective capping structure.
The G-7 and other like-minded countries have imposed sanctions on Russia in the wake of its military aggression in Ukraine in violation of international law.
Yellen told Suzuki at the meeting that the United States looks forward to exploring the feasibility of a price cap that "will further deny (Russian President Vladimir) Putin revenue to fund his military."
They also pledged to continue raising costs for Russia through intensified economic and financial sanctions aimed at ending the war.
Yellen visited Japan before traveling to the Indonesian island of Bali, where she and Suzuki will attend a two-day meeting of G-20 finance ministers and central bank governors from Friday.
Suzuki and Yellen previously met in Washington in April, at which time they agreed to closely monitor currency movements amid the yen's rapid depreciation.