Business · Singapore Bureau
Tokyo signals readiness to act on yen weakness amid market volatility
Japan's top currency official warned against persistent yen weakness on Tuesday, signalling the government remains prepared to intervene in foreign exchange markets if needed. The stance underscores Tokyo's concern over rapid currency movements affecting the world's third-largest economy.
LSN Singapore ·
Atsushi Mimura, Japan's chief currency diplomat, reiterated on September 4 that authorities are maintaining close surveillance of exchange-rate fluctuations, keeping intervention options on the table should market conditions warrant action.
The yen has faced sustained depreciation pressure in recent months, driven by the widening interest-rate differential between Japan and the United States. A weaker currency can benefit exporters through improved competitiveness abroad, but prolonged yen weakness risks stoking inflation through higher import costs, a particular concern for Japan's import-dependent economy.
Mimura's comments reflect Tokyo's balancing act between managing currency volatility and supporting sustainable economic growth. Japanese policymakers have previously intervened in currency markets during periods of sharp, disorderly yen movements, though such actions remain a tool of last resort.
The government's vigilance on the yen comes as the Bank of Japan continues its gradual monetary policy normalisation, with officials signalling potential interest-rate adjustments ahead. Market participants are closely watching for any shift in BOJ guidance that could influence currency dynamics in coming months.