US Warns Against Excessive Yen Volatility, Calls for BOJ Rate Hikes

The US Treasury Department has issued a warning against excessive yen volatility, calling for further interest rate hikes by the Bank of Japan. The statement came as the yen hit a 40-year low against the dollar on Thursday.

The Treasury's semi-annual currency report noted that yen weakness has persisted despite the narrowing of US-Japan interest rate differentials. Excess volatility in the yen is undesirable, according to the report.

The Bank of Japan raised its policy rate to a 31-year high of 1 percent in June and has signalled its readiness to keep raising rates.