Japan's top currency diplomat says yen's recent fall too rapid

Japan’s top currency official, Atsushi Mimura, expressed concern on November 12 that the yen’s recent decline has been “too rapid”. The comments came after the Japanese currency slid towards 160 against the US dollar. Mimura, who is Vice-Finance Minister for international affairs, also stated it is “too early” to forget the joint Japan-US intervention in the foreign exchange market during the summer to curb the yen’s depreciation.

The US dollar was trading near the 159 yen mark following Mimura’s remarks, still notably higher than the 158.87-158.89 yen level at 5pm local time on November 11. The dollar gained support overnight due to growing expectations of a US Federal Reserve interest rate hike, fueled by stronger-than-anticipated US consumer inflation data.

Mimura conveyed the impression that the recent currency movements have been too swift. Financial markets anticipate the Bank of Japan (BOJ) to initiate another interest rate increase as early as its forthcoming meeting in December, given the enduring inflation. While the BOJ has indicated that further hikes could be imminent if the risk of inflation surpassing its 2% target intensifies, the bank’s present policy rate of 1.25% remains lower than those in the US and Europe. This rate differential is a key factor contributing to the yen’s weakness against the dollar.

Japan's economic challenges have contributed to the yen’s decline. Factors such as high energy prices due to heightened Middle East tensions and the currency's weakness, which escalate import costs, have weighed on Japan, a resource-scarce nation. Earlier in 2026, Japan intervened in the market to support the yen. However, it has been unsuccessful in reversing the currency’s downward trend, partly due to concerns about the country's fiscal health as Prime Minister Sanae Takaichi advocates for increased fiscal spending.

Previously, the yen had plummeted to unprecedented levels, exceeding 163 per dollar, before Japan's interventions, including a joint effort with the US on July 31.