Japan signals readiness to intervene as yen slides

Tokyo: Japan's Finance Minister, Satsuki Katayama, has said the country has full freedom to respond to excessive fluctuations in the yen, signaling a willingness to intervene in currency markets to curb sharp declines.

Speaking at a press conference, Katayama said the recent weakening of the yen did not reflect underlying economic fundamentals and suggested speculative activity had exacerbated the moves.

She added that authorities would take appropriate measures in line with a September agreement with the United States to limit interventions to extreme currency volatility.

Following her remarks, the yen rose to around 156 per US dollar, still close to an 11-month low of 157.78 recorded last Friday.

While a weaker yen can boost exporters' revenues and Japan's global competitiveness, it can also increase import costs and inflation, especially given the country's limited natural resources.

Japan last intervened in the currency market in July 2024, buying yen after it fell to a 38-year low of 161.96 against the dollar.