FX.co ★ Yen Weakens Despite Verbal Interventions

The Japanese yen weakened past ¥161 per dollar on Friday, its lowest level since July 2024, despite renewed verbal intervention by Japanese authorities. On Thursday, Chief Cabinet Secretary Minoru Kihara reiterated that the government stands ready to act against excessive currency moves whenever necessary. The yen has now surrendered all the gains it made on April 30, when officials mounted a record-sized intervention to shore up the currency.

The latest slide came in spite of the Bank of Japan’s ongoing, gradual tightening cycle, including a 25-basis-point rate increase to 1% earlier this week, aimed at countering an energy-driven inflation shock linked to the conflict in the Middle East. At the same time, the US dollar gained support after the Federal Reserve left interest rates unchanged but signaled growing backing for additional rate hikes later this year. The widening policy gap between Japan and the United States continues to put downward pressure on the yen.