Japan's Mimura says markets shouldn't forget intervention risks as yen nears 160

Japan's chief currency negotiator, Atsushi Mimura, cautioned investors on Thursday that it is premature to overlook the risks of intervention as the yen approached the 160-dollar threshold. In his inaugural exchange remarks since late September, Mimura expressed his belief that recent currency fluctuations have been too swift. He reiterated that the summer's Japanese yen-buying measures, which included a joint effort with the US, should not be forgotten.

The US dollar climbed to 159.94 against the yen early Thursday, its strongest level in two months, driven by expectations of a Federal Reserve rate hike following strong US inflation data and stern comments from policymakers. The weakening yen has posed a challenge for Japanese officials due to skyrocketing import expenses. In October, the import price index, denominated in yen, climbed 24.8 percent year-on-year, data indicated.

Analysts from Mizuho Securities forecast the dollar will persistently strengthen against the yen, propelled by the robust US economy and persistent inflation fueled by substantial investment in artificial intelligence. Should the dollar surpass 160 and the weakening yen exacerbate inflation, intensifying the risk to Prime Minister Sanae Takaichi's administration, Tokyo might resort to unilateral intervention, as indicated in a report by Mizuho Securities analysts.