Japan's finance minister Satsuki Katayama has become a pivotal figure for Tokyo, Washington and global markets during a week of historic rises in Japanese bond yields and intense monetary policy messaging.

After returning from a Group of 20 meeting of finance leaders in North Carolina, Katayama insisted she received "no demand" from US Treasury secretary Scott Bessent for Japan to raise interest rates. Her comments came amid rising market speculation that she and Bank of Japan governor Kazuo Ueda had faced heavy pressure from Washington for the central bank to act at its September 18 meeting.

The week saw Japan's 5-year and 40-year government bond yields hit record levels, with the benchmark 10-year yield surpassing 3 per cent for the first time since 1996. The yen fluctued between ¥160 and ¥155.3 per dollar, while Tokyo spent a record $96bn on joint Japan-US currency intervention in July and August.

Katayama, Japan's first female finance minister and a self-described "common sense conservative," plays a crucial role in prime minister Sanae Takaichi's growth strategy, balancing massive spending with market confidence in fiscal discipline. Analysts warn that sustained high yields and yen weakness pose significant challenges for fiscal stability.