Japan Maintains FX Vigilance as Yen Surges Against Dollar
Japan has not relaxed its monitoring of foreign exchange markets, according to top currency diplomat Atsushi Mimura. His remarks come after a sharp rebound in the Japanese yen against the U.S. dollar, renewing speculation about possible currency intervention.
Speaking to reporters on Thursday, Mimura declined to comment on reports that authorities may have conducted rate checks following the release of U.S. employment data. Rate checks are often viewed by markets as a potential signal of upcoming intervention.
However, he made clear that Japan’s stance remains unchanged. Authorities will continue to monitor exchange-rate movements with urgency and maintain close communication with financial markets. Mimura emphasized that Tokyo has not lowered its guard against excessive currency volatility.
Close Coordination with U.S. Authorities
Mimura, who serves as Vice Finance Minister for International Affairs, also confirmed that Japan remains in close contact with U.S. officials regarding currency developments.
The Japanese yen was last trading at 153.02 per dollar, recovering sharply from levels near the psychologically important 160 mark. Analysts have suggested that a sustained move toward 160 could trigger direct intervention from Japanese policymakers.
Yen Rebound Sparks Intervention Speculation
The yen briefly weakened after the release of U.S. nonfarm payrolls data on Wednesday. It then rebounded strongly, prompting speculation that Tokyo may have carried out rate checks behind the scenes.
Since Prime Minister Sanae Takaichi’s election victory on Sunday, the yen has strengthened by nearly 3%. Investors believe her decisive mandate could promote greater fiscal discipline, reducing political uncertainty and limiting the need for negotiations with opposition parties.
Weak Yen Remains Policy Concern
A persistently weak yen has created challenges for Japanese authorities. Currency depreciation raises import costs and contributes to higher inflation, placing additional pressure on households and businesses.
Last month, the yen experienced three sharp upward spikes. The most significant movements followed reports of unusual rate checks involving the New York Federal Reserve. These developments fueled speculation about the possibility of coordinated U.S.-Japan intervention for the first time in 15 years.
With currency volatility increasing, Japan continues to signal that it stands ready to act if necessary to stabilize foreign exchange markets.
