Finance Minister Katayama sent shockwaves through currency markets today, warning that "the time to take decisive measures is approaching" as the yen weakened to the upper 160 yen range against the dollar. Her remarks triggered an immediate reversal, with the yen strengthening by over one yen to trade in the lower 159 yen range.
The minister's strong language was seen as a clear signal that Japanese authorities are preparing to intervene in the foreign exchange market to curb excessive yen depreciation. Market participants interpreted the statement as a shift toward more aggressive action, prompting a rapid unwinding of dollar-long positions.
Analysts noted that the Finance Ministry appears increasingly concerned about the economic impact of a weak yen, including rising import costs and pressure on households. The yen's sudden rebound underscores the market's sensitivity to any official commentary suggesting imminent intervention.