Tokyo's Warning Falls on Deaf Ears as USD/JPY Hits New High

Japan's Finance Minister, Katayama, reiterated the country's warning about the Yen's slide on Thursday. Despite Tokyo's warnings and interventions, USD/JPY has continued to rise, touching its highest level since early September at 159.00.

The pair is now trading just under this level, marking its fifth consecutive gain. The Bank of Japan (BoJ) had raised its policy rate to 1.25% on September 18, but Governor Ueda noted that financial conditions will remain accommodative. Two board members voted against the increase, indicating that another hike may not be imminent.

USD/JPY has been increasing despite the BoJ's efforts to intervene in currency markets. The Japanese authorities checked rates with dealers in overseas markets on September 18, a step often taken before intervention. However, Tokyo's warning and interventions have not seemed to stem the tide of USD/JPY's rise.

The Federal Reserve raised its range to 3.75%-4.00% two days earlier than the BoJ's rate hike, with no dissenting votes. The narrowing gap between Japanese and US bond yields has favored the US Dollar against the Yen.