Exclusive-Japan's currency diplomat Mimura urges markets to heed 'very clear' warning on yen

TOKYO, September 28 - Japan's top currency diplomat Atsushi Mimura has urged financial markets to heed Tokyo and Washington's clear warning about the yen's recent decline. Mimura, speaking to Reuters, emphasized that he will closely monitor whether markets continue to take the message at face value. He expressed that while he remains neither satisfied nor reassured by the yen's movements, Japan remains on high alert against the risk of further declines.

Mimura declined to comment on potential future intervention but stated he has no concerns about funding constraints limiting Japan's ability to act. The yen spiked against the dollar after Mimura's remarks, breaching the 157 mark. The weak yen, which drives up the cost of imports, has been a source of concern for Japanese policymakers, prompting the Bank of Japan to raise interest rates to a 31-year high.

However, this move has not succeeded in stabilizing the yen, as the US Federal Reserve's rate hikes and hawkish communication have contributed to a widening gap between Japanese and US policy rates. Mimura highlighted the strong relationship between Japan and the US, noting that it extends beyond exchange rates to include cooperation on economic security, critical minerals, and global supply chains.