Japan’s government has reiterated its readiness to intervene in currency markets to support the yen amid a sustained weakening against the U.S. dollar. Chief Cabinet Secretary Minoru Kihara stated that authorities remain prepared to take appropriate action whenever necessary as the yen hovers near historic lows.
The yen recently fell to around 162 against the dollar, surpassing the 160 level that Japanese officials regard as a critical threshold prompting intervention. This depreciation persists despite earlier large-scale efforts by Japan’s government to stabilize the currency.
The decline in the yen is driven in part by ongoing geopolitical uncertainties in the Middle East and expectations surrounding the U.S. Federal Reserve’s interest rate policy. These factors have bolstered demand for the dollar, putting continued pressure on the yen.
Finance Minister Satsuki Katayama engaged in an online discussion with U.S. Treasury Secretary Scott Bessent on Monday night, although details of the exchange have not been disclosed. Kihara declined to comment further on the meeting or confirm any imminent intervention measures.
Japanese authorities have repeatedly warned speculative traders that they are willing to act decisively to counter sharp declines in the yen. However, some market analysts question the long-term effectiveness of such interventions. Daisaku Ueno, a strategist at Mitsubishi UFJ Morgan Stanley Securities, noted that while yen-buying operations can temper speculative selling temporarily, structural economic factors may continue to weigh on the currency.
Ueno highlighted the persistent gap between real interest rates in the United States and Japan as a fundamental challenge. “The yen-selling pressure is structurally driven by investment decisions and real demand related to Japanese economic activities,” he said, suggesting that interventions might not achieve sustained currency appreciation.
As the yen remains under pressure, market observers will be closely monitoring any further actions from Japanese officials and potential shifts in monetary policies both domestically and abroad.