Japan Readies for Decisive Action on Yen as it Hits 40-Year Low

Japan's Finance Minister Kazuyo Katayama has signaled the country's readiness to take decisive action on the yen, which has hit a 40-year low against the dollar. The move comes after the US Treasury released its semi-annual currency report, which called for further Bank of Japan rate hikes and flagged substantial yen undervaluation.

Katayama cited the joint US-Japan statement that excessive foreign exchange volatility is undesirable, as mentioned in the Treasury's report. This framing gives Tokyo's warnings a degree of shared cover with Washington.

The finance minister noted that Japan and the United States are in close communication around the clock, but declined to comment on specific currency levels that might prompt action. Katayama reiterated that Japan is ready to respond appropriately to currency moves at any time as needed, and separately said the country stands ready to take decisive action on the foreign exchange market.