$165 Yen: Tokyo's Intervention Threats Ignored as Oil Prices Soar

The Japanese yen is plummeting towards its worst weekly loss in over two months, falling below the closely watched 165-per-dollar threshold despite repeated intervention warnings from Tokyo.

On Thursday, the yen touched a fresh 40-year low of 163.99 and was down about 0.9% for the week as of Friday afternoon in New York.

The yen's slide is being driven by escalating tensions in the Middle East, which have pushed oil prices sharply higher. Brent crude topped $100 per barrel and West Texas Intermediate (WTI) pushed above $90 this week after Iran-backed Houthis claimed their first attack on commercial ships in recent months.

Market participants are ignoring warnings from Japanese officials who said authorities stand ready to intervene in currency markets if necessary. Tony Sycamore, an analyst at IG Australia, said: 'Against the backdrop of surging energy prices, the hawkish Fed repricing, and the yen's loss of safe-haven status, any comments from Japanese officials today about being ready to intervene or faster BOJ rate hike will likely be ignored.'

The Bank of Japan (BOJ) is widely expected to hold rates steady at its policy meeting next week. Half of economists surveyed by Bloomberg still expect the central bank to wait until December to lift rates, with Prime Minister Sanae Takaichi's government seen as a key obstacle to further action.