Japan's Top Currency Official Issues Intervention Warning as Yen Weakens on BOJ's "Cautious Rate Hike"

Stock News12-22 11:08

Following the Bank of Japan's (BOJ) interest rate decision last Friday that weakened the yen against the U.S. dollar, Japan's top currency official issued a warning over recent foreign exchange market volatility. Atsushi Mimura, Japan's highest-ranking foreign exchange diplomat, expressed deep concern over "one-sided, abrupt movements" in the market after the central bank's policy meeting. He stated authorities would take appropriate measures against excessive volatility.

After the BOJ announced its rate hike on Friday, Governor Kazuo Ueda opted to maintain policy flexibility without sending overly hawkish signals, failing to bolster the yen. This disappointment among investors pushed the USD/JPY pair to 157.78 over the weekend.

On Monday, the yen briefly strengthened to 157.51 against the dollar following Mimura's remarks. With analysts widely expecting the BOJ to hold rates steady for about six months before its next hike, further yen weakness toward the 160 level could force Japan's Ministry of Finance to intervene in currency markets.

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