Yen Surges on Intervention Fears and PM Takaichi's Warning
The yen has strengthened significantly in recent days, outperforming its peers in the G-10 group. The currency rose by as much as 1.2% on Friday to a value of 156.94 per dollar, marking its best day in nearly three weeks.
This surge comes after Japanese officials met with their US counterparts to discuss concerns over the yen's weakness. Prime Minister Sanae Takaichi stated that an undervalued currency is 'problematic,' while Treasury Secretary Scott Bessent emphasized the desirability of a strong yen in discussions with Japanese Finance Minister Satsuki Katayama.
The Bank of Japan's (BoJ) reluctance to tighten monetary policy has contributed to the yen's recent weakness, with the interest-rate gap between the US and Japan remaining wide. Market participants have viewed the area around 160 per dollar as a key level where intervention risk increases.