Japanese Finance Minister Satsuki Katayama has signaled that Tokyo is prepared to take decisive action in the foreign exchange markets, a clear warning to traders as the yen slides to its weakest level in four decades.
The intervention threat comes as the Japanese currency breached the psychologically significant ¥162 level against the US dollar during morning trading in Tokyo.
This move marks the first time the pair has traded at such lows, shattering a support level that market participants had previously viewed as a firm boundary for the Bank of Japan.
Katayama’s remarks, delivered on Wednesday, underscore the growing pressure on Japanese policymakers to defend the currency.
The yen’s collapse has been driven by persistent interest rate differentials and broad-based dollar strength, leaving the BoJ with limited policy tools to counter the depreciation without risking domestic economic stability.
For investors, the minister’s comments raise the probability of direct market intervention, which could trigger sharp, short-lived reversals in USD/JPY.