TOKYO, April 3: Japanese Finance Minister Satsuki Katayama has warned currency traders that the government is prepared to act against speculative moves in foreign exchange markets. The yen, trading near the psychologically significant 160-per-dollar mark, has raised concerns about possible intervention by Tokyo authorities.
Katayama highlighted growing volatility in both crude oil futures and foreign exchange markets, stating that such developments are affecting public livelihoods and the economy. This comes as geopolitical turmoil in the Middle East continues to drive demand for the safe-haven dollar, causing the yen to weaken by about 2.3% since the U.S.-Israel conflict with Iran began.
Market analysts are divided on whether Tokyo will intervene. Some expect action if the yen weakens beyond 161-162 per dollar, while others believe authorities may wait until after the Bank of Japan's next policy meeting on April 27-28. If the BOJ raises rates and the yen recovers, intervention might not be necessary. However, if the yen weakens further afterward, authorities could step in.
Meanwhile, Katayama emphasized close monitoring of bond market volatility, indicating a coordinated fiscal and monetary response if needed.