Japan Warns of Swift Action as Yen Hits 40-Year Low Near 164 per Dollar

Japan's Finance Minister Satsuki Katayama reaffirmed the government's readiness to take decisive action in the foreign exchange market, echoing her previous statements as the yen dropped to a fresh 40-year low near 164 per dollar. The minister emphasized that Japan is prepared to respond appropriately and swiftly whenever necessary.

The yen hit its softest level since November 1986, with the US Treasury Department warning about excess volatility in the currency. Katayama stated that Japan and the United States share a common view on this issue, with both countries agreeing that excessive foreign exchange volatility is undesirable.

According to senior economist Masato Koike at Sompo Institute Plus, a unilateral intervention by Japan may have little effect in correcting the yen's decline since it's largely caused by dollar strength. He warned of a possible scenario where no intervention is carried out and the yen weakens further.