FX.co ★ Yen Remains on Intervention Watch

The Japanese yen weakened toward 159.5 per US dollar on Monday, approaching the closely watched 160 level that has previously prompted official intervention. Japan’s top currency official, Atsushi Mimura, reiterated that the government stands ready to take all necessary measures to address excessive moves in the foreign exchange market. He also pointed to the prolonged conflict in the Middle East and rising oil prices as key factors weighing on the yen, emphasizing that currency volatility has a direct impact on people’s daily lives.

The yen was unable to sustain last week’s gains, which followed the Bank of Japan’s decision to leave its policy rate unchanged while signaling a tilt toward tighter monetary policy to counter inflationary pressures stemming from higher energy costs. At that meeting, BOJ board member Hajime Takata dissented for a second time, again calling for a 25-basis-point rate hike to 1%. Governor Kazuo Ueda added that the central bank could still raise rates if the economic slowdown linked to the Iran-related conflict proves to be only temporary.