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    Japan’s Finance Minister Satsuki Katayama voices concerns over rapid foreign exchange market shifts

    by VT Markets
    /
    Dec 8, 2025
    The Role of the Bank of Japan The Bank of Japan is important for managing currency. Sometimes, it steps in to lower the value of the Yen, but political factors can hold it back. From 2013 to 2024, the Bank’s very loose monetary policy led to the Yen losing value against other currencies. However, recent changes in policy are helping the Yen regain some strength. The value of the Yen is influenced by the difference in 10-year bond yields between Japan and the US. This gap increased because of Japan’s earlier monetary approach but is now decreasing as the Bank of Japan changes its policy and other central banks reduce rates. During market instability, the Japanese Yen is seen as a safe investment and tends to gain value against riskier currencies. Japan’s Growing Concern About the Yen Japan’s finance minister is now openly worried about the Yen’s weakness, which raises the likelihood of direct intervention in the currency market. The minister’s remarks about “one-sided, rapid moves” serve as a warning, especially with the USD/JPY rate around 155.25. This indicates that significant drops in the Yen might be unacceptable. We’ve seen similar situations before, with major actions taken to support the Yen in late 2022 and spring 2024 when the dollar rose past similar levels. These interventions led to sudden drops in the USD/JPY pair, highlighting the seriousness of such warnings. The Ministry of Finance has a clear limit for tolerable Yen weakness, and we appear to be nearing that limit again. Create your live VT Markets account and start trading now.

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