Japan's finance minister vows action as yen breaches 160 threshold

Japan's government pledged to take appropriate action regarding currency volatility on Friday, as the yen once again breached the crucial 160 per dollar mark. Finance Minister Satsuki Katayama issued a renewed warning, emphasizing the need for close cooperation with the US Treasury to address the issue. The yen experienced a rapid decline, plummeting to 160.03 per dollar, marking its lowest point since early September.

The yen's recent volatility stemmed from a hawkish assessment of the Federal Reserve's interest-rate path, which fueled speculation about the currency's future. Katayama's statements mirrored a previous cautionary note from top currency diplomat Atsushi Mimura on Thursday. Mimura cautioned that it was still too early to dismiss the possibility of another intervention, similar to the one conducted in July.

Japan's last intervention took place between July 30 and August 3, during which the Japanese government spent a staggering 15.4 trillion yen ($96.47 billion) in an attempt to stabilize the currency. During this period, the yen reached alarming levels near 164 per dollar, its weakest point in 40 years.

The Federal Reserve Bank of New York's recent report on currency market operations revealed that the US Federal Reserve had stepped in on July 31 by purchasing 79.4 billion yen in the spot market. This intervention, which involved selling euros from the Exchange Stabilization Fund, marked the first US yen-buying intervention since 1998. The report highlighted the collaborative effort between the US and Japan to support the Japanese currency amid the prevailing market turbulence.