Yen Drops Biggest Weekly Percentage Since February Amid Oil Price Surge

The Japanese yen has recorded its biggest weekly drop in over two months, as oil prices continue to rise and inflation fears grow.

This comes despite Japan's Finance Minister Satsuki Katayama reiterating the government's readiness to take action in the foreign exchange market. However, some analysts believe another intervention by Japanese officials will only have a short-lived effect without coordinated steps such as more aggressive rate hikes by the Bank of Japan (BoJ).

The US Treasury Department has also joined calls for rate hikes by the BoJ, warning that excessive currency volatility is undesirable.

According to Macquarie Group's Thierry Wizman, the yen's decline is due to its low yield and terms-of-trade shock caused by higher oil prices.