Japan Raises Concern as Yen Falls to 4-Month Low Amid FX Volatility

Japan’s Finance Minister Katsunobu Kato expressed alarm on Friday over the yen’s sharp decline, after the currency slid to a 4-month low against the U.S. dollar. The USD/JPY pair touched around 150.91, its weakest since March 28.

Speaking at a press briefing, Kato warned against speculative trading and said the recent moves in the foreign exchange market were not aligned with economic fundamentals. He called for more stability in currency markets.

💵 Dollar Strength Pressures Yen

The yen’s drop came as the U.S. dollar recorded its strongest weekly gain in nearly three years, driven by rising expectations that the Federal Reserve will keep interest rates higher for longer.

🏦 Bank of Japan Signals No Urgency

Meanwhile, Bank of Japan Governor Kazuo Ueda downplayed concerns about the weaker yen, saying current exchange rates are unlikely to have a major short-term effect on Japan’s inflation outlook.

His comments reinforced market expectations that the BoJ won’t rush to raise interest rates, further weighing on the yen.

📉 Market Impact

The dollar's rise and Japan’s relaxed stance on the yen’s weakness have raised concerns among traders and policymakers, especially as FX volatility grows.

Kato's remarks suggest the government may step in with more forceful measures if volatility continues or worsens.