Responding to a question regarding President Trump's recent about-face on the importance of a strong dollar, Mnuchin explained why, over the long term, a strong dollar is good for the US.
Shares dipped on Monday while the dollar and USA bond yields fell after soft US economic data hurt investor sentiment already frayed by worries over North Korea and upcoming French elections.
Treasury Secretary Steven Mnuchin said in a Financial Times interview published Monday that enacting tax reform legislation by August is "highly aggressive to not realistic at this point".
Tensions on the Korean peninsula have contributed to the dollar rise as a "risk-off" mentality takes effect among traders.
The dollar rose to an Asian session high of 109.21 yen.
While the dollar gained after Mnuchin's initial remarks late on Monday, on Wednesday the euro hit a three-week high as the dollar was weakened by doubts over a fiscal boost promised by the president and by the pricing out of bets on three U.S. Federal Reserve interest rates hikes this year.
Mnuchin also acknowledged that one of the key elements in a tax overhaul plan being developed in the House of Representatives, a border-adjustable tax on imports that would give preferential treatment to exporters and to retailers and manufacturers who source goods and raw materials within the USA, is facing resistance from within the administration.
"For dollar/yen, the main focus will be on what kind of pressure the United States could apply on Japan as basically US trade policy is linked with a policy for a weaker dollar", said Junichi Ishikawa, senior forex strategist at IG Securities in Tokyo.
"What's happening is that the market continues to price out the reflation trade in the United States", said Societe Generale currency analyst Alvin Tan, in London.
Aside from concern over North Korea's actions, we are still waiting to see how the market is going to fully react to this move. The only way a major legislative effort like a tax code rewrite gets through Congress is when the pain of things like lost deductions and closing loopholes can be balanced by sweeteners like lower rates and greater simplicity.
USD/JPY now trades just under 109, up from the lows of 108.12 it reached on Easter Monday. However, weaker prices of iron ore, Australia's key export, have prevented the currency from staying above that threshold.