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(Bloomberg) — Japan intends to closely monitor the impact on its currency of US President Donald Trump’s new tariffs and is worried about the international fallout from the trade imposts, Finance Minister Katsunobu Kato said. 

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“We need to carefully see how the exchange rate and other factors will be affected and what form US monetary policy will take in the future,” Kato said Sunday in an interview with Fuji Television. He also said Japan is very concerned about how the tariffs may impact the global economy. 

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Kato spoke as nations and companies brace for potential repercussions after Trump unleashed the first salvo of his tariff war, with general levies of 25% on Canada and Mexico and 10% on China. Trump signed the orders for the tariffs which will take effect on Tuesday, though it’s unclear whether the period in between provides a last-chance window for a deal. 

Prime Minister Shigeru Ishiba is reportedly set to meet Trump on Feb. 7 in the US. Tokyo is trying to strengthen ties with the new US administration and Kato recently held a virtual meeting with Treasury Secretary Scott Bessent. 

Asked if he had any indications from his US counterpart on whether Trump intends to weaken the dollar and strengthen the yen given the president sees the strong greenback as problematic, Kato said the two didn’t discuss the matter specifically. 

“We confirmed that we will closely discuss foreign exchange as we look at the financial and economic conditions as a whole,” he said. “I got the impression that he is a very calm person.”

The yen’s weakness has pushed up the prices of imported food, energy and materials, which has stoked inflation. Persistent price pressures have prompted the Bank of Japan to raise interest rates gradually, while voter discontent over a cost-of-living crunch played a role in delivering a major setback for the nation’s ruling coalition in last year’s election.

Japan intervened in the foreign exchange market multiple times last year to prop up the yen.

“When import prices rise, we will see cost-push inflation,” Kato said. “On the other hand, prices also increase when domestic demand expands. So, there are several phases and I think it is important to carefully assess each situation and take the necessary measures.”

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