FX.co ★ Yen Weakness Triggers Fresh Verbal Warning

The Japanese yen weakened beyond 159.5 per dollar on Tuesday, edging closer to the closely watched 160 level that previously triggered official intervention to support the currency and prompting renewed verbal warnings from Tokyo. Finance Minister Satsuki Katayama said authorities stand ready to take appropriate action in the foreign exchange market when necessary, while highlighting increased volatility in oil and other financial markets. She also noted that ministry officials remain in close contact with their counterparts in Washington regarding currency developments. Data released on Friday showed that Japanese authorities spent ¥11.7 trillion on currency intervention in late April, confirming widespread market expectations. At the same time, investors are now pricing in roughly a 78% probability that the Bank of Japan will raise interest rates again later this month, as inflationary pressures linked to the Middle East conflict continue to build.