The Japanese yen hovered around 163 per US dollar after hitting a four-decade low of 163.24 earlier this week, as traders weighed potential interventions by authorities as well as expectations that the Bank of Japan could accelerate interest-rate hikes.
Sentiment toward the currency has weakened in recent weeks as investors adjust to a changing policy environment under Prime Minister Sanae Takaichi, whose administration has struggled to dispel market perceptions that it could pressure the BOJ to delay monetary tightening.
Rising Middle East tensions have also driven oil prices sharply higher, adding pressure on Japan’s import-dependent economy.
Japanese Finance Minister Satsuki Katayama reiterated that the government was prepared to take decisive action in the foreign exchange market if necessary.
However, these efforts have done little to reverse the yen’s broader weakness amid broad-based dollar strength and Japan’s relatively low interest rates.