Tokyo signals readiness to act against excessive yen volatility after May reserves fell by a historic amount, hinting at possible intervention.
Japan’s finance minister reiterated the country’s right to intervene in currency markets as the yen neared 160 per dollar, a level seen as a potential trigger for action. The warning follows a record $42 billion drop in foreign reserves in May, the largest decline since 2000, fueling speculation Tokyo may have already stepped in to stabilize the yen.
The yen’s recent weakness has been attributed to speculative activity linked to geopolitical tensions, including the Middle East conflict. Finance Minister Satsuki Katayama confirmed close coordination with U.S. authorities, citing a joint statement from last September that permits intervention to counter excessive volatility while supporting market-determined exchange rates.
Prime Minister Takaichi acknowledged the mixed effects of a weaker yen but emphasized economic growth over currency manipulation. The yen traded at 160.015 per dollar, down from levels last seen in late April, as markets weighed the likelihood of further official action.