FX.co ★ Yen Holds Decline on Energy Concerns

The Japanese yen hovered around 157.4 per dollar on Tuesday, after nearly a 1% slide in the previous session, weighed down by rising energy costs amid escalating conflict in the Middle East and Japan’s heavy dependence on energy imports. Finance Minister Satsuki Katayama reiterated that currency market intervention remains an option to support the yen, saying authorities are watching the decline “with a strong sense of urgency” and maintaining close coordination with the United States. Japan continues to grapple with the dual challenge of sluggish economic growth and persistent inflation, complicating the Bank of Japan’s policy outlook. Deputy Governor Ryozo Himino confirmed that the central bank intends to keep raising interest rates, though he offered no clear timetable. Investors are now awaiting remarks from Governor Kazuo Ueda later in the day for additional policy signals. Last week, the government nominated two reflationist academics to the BOJ’s policy board, while Prime Minister Sanae Takaichi was reportedly cautious about the prospect of further rate hikes.