FX.co ★ Japanese Yen Weakens to 1-Month Low

The Japanese yen weakened beyond 160 per dollar on Wednesday, its lowest level in a month, erasing roughly two-thirds of the gains achieved after Tokyo and Washington jointly intervened in the currency market about a month ago to support the yen. Market participants remain on alert for the possibility of further official intervention, given the negative effects of a weaker yen on domestic inflation and the broader economy. The currency continues to face pressure from wide interest rate differentials, mounting fiscal concerns in Japan, and elevated oil prices tied to the conflict in the Middle East. This week, US Treasury Secretary Scott Bessent met with Finance Minister Satsuki Katayama, and the two agreed to maintain close coordination to ensure “orderly” movements in the yen. Bessent also pressed Bank of Japan Governor Kazuo Ueda to take “decisive” monetary action to address yen weakness, bolstering expectations that the BOJ will raise interest rates this month.