Markets volatile but no huge drop in short-term liquidity, BOJ official says.

Global markets are experiencing volatility from uncertainty over U.S. tariff policy but not seeing a huge decline in short-term liquidity, a senior Bank of Japan official said on Tuesday.

“Unlike during the global financial crisis, we’re not seeing a major decline in short-term liquidity. But the BOJ will continue to scrutinise market developments, and their impact on global and domestic economies,” Akio Okuno, head of the central bank’s monetary affairs department, told parliament.

Global stock, currency and bond markets have whipsawed due to President Donald Trump’s back-and-forth comments on tariffs, with some analysts seeing the recent sharp declines in U.S. Treasuries and the dollar as a sign markets are losing confidence in the safe-have status of U.S. assets.

Japan, for its part, is gearing up for trade negotiations with the United States this week that will likely touch on the thorny topic of currency policy, with some officials privately bracing for Washington to call on Tokyo to prop up the yen.

Finance Minister Katsunobu Kato said Japan and the U.S. share the view that markets should set exchange rates, and that excessive and disorderly currency moves have adverse effects on the economy and financial stability.

Source: Globalbankingandfinance