Dollar Soars as Yen Hits 40-Year Lows Amid Calls for Rate Hikes

The Japanese yen is experiencing its largest weekly decline in over two months, falling to 40-year lows despite efforts by Japan's government to support the currency.

The rise in oil prices has buoyed the dollar, which is set for its biggest weekly gain since mid-June. The US Treasury Department has warned that excessive currency volatility is undesirable and called on the Bank of Japan (BoJ) to implement more aggressive rate hikes.

Japan's Finance Minister Satsuki Katayama has reiterated the government's readiness to take action in the foreign exchange market, but some analysts believe another intervention by Japanese officials may have only a short-lived effect without coordinated steps such as a more aggressive path of rate hikes by the BoJ.