Mimura Warns Markets to Heed 'Very Clear' Yen Warning from Tokyo and Washington

Japan's top currency diplomat Atsushi Mimura has urged markets to take seriously a 'very clear' message from Tokyo and Washington on the yen, warning of excessive falls in the currency. The message was delivered last week during a summit between US President Donald Trump and Japanese Prime Minister Sanae Takaichi.

Mimura stated that the two countries had sent a strong signal, which markets should take at face value. He also mentioned that he would be watching closely whether markets will continue to respect this message. However, Mimura declined to comment on potential intervention to prop up the yen.

The Japanese government has been concerned about the weak yen, which has pushed up import costs and inflationary pressures. The Bank of Japan raised interest rates to a 31-year high of 1.25% earlier this month in an effort to curb inflation. However, the move has failed to strengthen the yen.

Mimura noted that the rate gap between Japan and the US is narrowing as both countries raise interest rates. He described the joint intervention on July 31 as a 'currency alliance' and emphasized the strong relationship between Japan and the US in areas beyond exchange rates.