Mimura Warns Markets: Heed Tokyo and Washington's Clear Warning on Yen

Japan's top currency diplomat Atsushi Mimura has urged markets to take heed of Tokyo and Washington's 'very clear' warning on the yen. The weak Japanese currency has become a source of concern for policymakers, pushing up import costs, including fuel prices, which have spiked due to the Middle East war.

Mimura emphasized that Japan and the US had delivered a unified message on the yen, signaling their resolve to act against excessive falls in the currency. He declined to comment on whether Japan could intervene again to prop up the yen, but stated that Tokyo remained on guard against the risk of renewed declines in the currency.

The yen spiked against the dollar after Mimura's remarks, breaking through the 157 line to trade around 156.75. The Bank of Japan raised interest rates to a 31-year high of 1.25% earlier this month following a hike in June, but the move failed to prop up the yen.

Mimura noted that the huge US-Japan rate gap will not narrow quickly, citing the Fed's rate hike and hawkish communication as factors contributing to market views on the currency.